Hotel industry suffers from empty rooms as L.A. building boom creates oversupply.

Hotel industry suffers from empty rooms as L.A. building boom creates oversupply 

The number of rooms rented by hotels in Los Angeles County in February increased just half a percentage point when compared with the same month in 1989, according to a monthly hotel industry report compiled by Pannell Kerr Forster. For the first two months of this year, 1.6 percent more hotels rooms were rented than the first two months of 1989.

Revenues collected by hotels from room rentals were up 3.7 percent in February vs. February last year, the report showed. Those revenues were up 5.9 percent for the year to date.

Nevertheless, there have been more empty rooms this year than last because the hotel industry is still feeling the effects of a building boom that has created more supply than demand for lodging units. The occupancy rate slumped to 70.7 percent county-wide for February, down 2.4 percent from last year. (See accompanying chart.) So far this year, 67.1 percent of county hotel rooms have been rented, compared with 70 percent for the same period in 1989.

The lowest occupancy rates were found along the Interstate 5 corridor, 60.7 percent; the San Fernando Valley, 63.1; and Hollywood and downtown Los Angeles, both with 69.9 percent. Hotels in unspecified areas of Los Angeles County surveyed by the accounting firm rented just 62.5 percent of their rooms.

The largest increases in vacant rooms in February were recorded in Pasadena, 8.3 percent; San Fernando Valley, 8.2 percent; the LAX area, 5.5 percent; and downtown Los Angeles, 5.2 percent.

The biggest gainers were the Lancaster/Palmdale area, where 9.4 percent more rooms were rented in February 1990 than the same month the year before. The San Gabriel Valley finished second with a 5.8 percent increase. The Lancaster/Palmdale area also registered the largest gain in percentage of hotel rooms rented for the year to date, up 11.7 percent. Substantial gains were also found in Hollywood, 6.2 percent; Beverly Hills, 4.8 percent; and the San Gabriel Valley, 4.6 percent.

Major losers in the year-to-date category were led by Pasadena, down 16 percent; and the San Francisco Valley, 9.1 percent.

Through February, hotels were most full in Culver City/Marina del Rey, 75.9 percent, up 1.5 percent over last year. The emptiest hotels were found in the San Fernando Valley where just 58.6 percent of rooms are being rented.