Hoteliers face down slump by increasing marketing: dearth of conventions spells trouble for airport rooms.

Hoteliers face down slump by increasing marketing

Dearth of conventions spells trouble for airport rooms

As Los Angeles International Airport-area hotel revenues follow the aerospace, tourism and convention industries into a generalized slump, hoteliers are becoming more aggressive in seeking out new sources of income.

Airport hotel rooms were 73 percent full during the first four months of 1990, a 3 percent decline from the same period a year ago, according to the latest data compiled by accounting firm Pannell Kerr Forster.

"This [LAX] market is primarily a soft market right now," said Maryetta Bowen, director of sales at the 570-bed Viscount Hotel, located at 9750 Airport Blvd. The hotel, explained Bowen, has been more fortunate than others because its average daily rate, or what the hotel takes in each day, has increased because of its travel-related clientele.

Craig Jacobs, director of sales at Hyatt at Los Angeles, 6225 W. Century Blvd., said the airport hotels have traditionally lodged both convention and business travel customers because of their proximity to LAX and lower rates than downtown hotels.

However, convention business is down and business travelers are not staying "as often or as long" as businesses are now cutting their budgets, Jacobs said.

Bowen attributed part of the decline to Los Angeles' negative national media image as a gang-and-crime infested city so "people think the problem is worse than it is." Meanwhile, Florida and other states are spending more money on advertising dollars than Southern California, she added.

LAX-area hotels will also have to compete with other downtown Los Angeles, Westside and beach hotels for a slice of a relatively small convention pie for the next four years. Los Angeles only has 25 conventions booked through 1994, a fraction of the 140 booked by Anaheim, which has a larger convention center and more downtown hotel rooms, according to Convention and Visitors Bureau statistics.

Plus, the LAX hotels have additional woes specific to their area. The surrounding communities of El Segundo, Torrance and other South Bay cities have many aerospace companies that are cutting budgets and laying off workers.

The decline in demand comes at a time of an increase in hotel-room supply in the LAX area as a result of new hotel construction.

The hotels, however, are no longer just relying on the Los Angeles Convention and Visitors Bureau to market Los Angeles on their behalf. Twenty-three area hotels are members of Team LAX -- an association of area hotel sales people who meet each month to coordinate marketing efforts and discuss problems of mutual concern.

Team LAX was formed last summer during the "height of the turmoil" at the Convention and Visitors Bureau, explained Julie Guest, director of sales at the Double-tree Hotel in Marina del Rey. "The hotels wanted to market their properties in a more proactive way and put their destiny into their own hands," she said.

Last September, members of the group volunteered to help the Convention and Visitors Bureau staff call a list of 2,500 associations to promote Los Angeles as a desirable convention site. The effort provided leads for all area hotels, Guest said.

Currently, the group is organizing a tour of all member hotels for new Convention and Visitors Bureau staff. The group also hosted George Kirkland, bureau president, and asked him to respond to a list of questions on problems troubling the region.

Guest said Team LAX is also sending brochures with information about each airport-area hotel to the Convention and Visitors Bureau so it can pass the information on to meeting planners.

Jacobs said the Hyatt is also increasing its own marketing efforts by hiring additional sales people, doing telemarketing campaigns and trying to get listed on airline computer reservation systems.

The present decline in convention bookings can be attributed to poor marketing efforts five years ago, said Michael Collins, the Convention and Visitors Bureau vice president for public affairs, because of the long lead time necessary in convention planning.

Collins said there are numerous reasons for the soft hotel market including a decline in domestic travel, a sluggish economy and aggressive marketing in Orange and San Diego Counties for convention and conferences.

But Collins said the main problem is Los Angeles' poor national image and the bureau is now increasing its marketing efforts to change people's perceptions about Los Angeles.

Los Angeles' current image problems are similar to those of New York City in the mid-1970s when that city was on the verge of bankruptcy and receiving bad press about its crime, congestion and pollution, said Collins. New York bounced back by creating the "I Love New York" campaign and so, Collins said, Los Angeles will also need to emphasize its best qualities to attract more visitors and additional convention business.

The Convention and Visitors Bureau is hoping that it can boost Los Angeles convention in the 1990s when it completes an expansion of the convention center by July 1993. The expansion will more than double the Convention Center's size from 334,000 square feet to 681,000 square feet, and the number of meeting rooms will be increased from 20 to 66.

The proposed expansion just received needed funding assistance when the Los Angeles City Council recently approved a half-cent increase in the hotel bed tax, which should raise an additional $44 million toward the $287 million expansion project.