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Meeting Bookers Optimistic 2004 Will Mark
Rebound Despite Potential Hurdles;
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Attendance Boosts at Recent Conventions Have Made
Orange County California Hoteliers Hopeful
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By SANDI CAIN, January 2004

For Orange County’s meeting industry, 2004 truly could be a happy new year.

Meeting planners, corporations and industry analysts are projecting a long-awaited upturn as a growing economy, improved business conditions and new product launches fuel new demand for meetings and conventions.

But challenges remain, and visitor-related businesses are keenly aware that one terrorist incident, another SARS outbreak or a market tumble could turn the tentative smiles to frowns.

The Anaheim/Orange County Visitor & Convention Bureau reports that almost 300 meetings and conventions already are slated for the Orange County area this year, compared to more than 600 for all of 2003. With groups still booking events on short lead time, bureau officials believe they are on pace to meet or exceed 2003 numbers for the Convention Center and area hotels.

“There are traces of optimism,” said Charles Ahlers, president of the Anaheim/Orange County Visitor & Convention Bureau.

Ahlers said visitor spending was up 2% in 2003 to $6.8 billion and expects that to climb again in 2004. International travel to meetings also is up.

“But corporate money is still holding back,” he said.

Attendance boosts at recent conventions have made area hoteliers hopeful.

Recently, at the American Academy of Ophthalmology convention, attendance for the November event increased 8% to 23,000, versus a year earlier.

The Medical Design and Manufacturing convention — a partnership of five groups in one meeting — expected about 40,000 attendees to its show in early January. Industry publication Tradeshow Week listed the convention as one of the five largest healthcare shows in the country.

Last week, NAMM — the annual music products convention that is one of Anaheim’s largest — was hoping for record-setting attendance. In 2003, the convention drew about 67,000 attendees.

Scott Robertson, NAMM’s director of marketing and communications, said in December the number of exhibitors was up and that the international contingent was looking strong for the first time since January 2001.

Those improvements track well with national trends.

Groups such as the National Business Travel Association project a 6% growth in business travel and spending for 2004, while the Travel Industry Association, a national trade group, estimates convention and business trip growth of about 4%.

Companies, meanwhile, are cautiously planning to proceed with meetings that might not have been held a year ago, as they feel a bit more secure about budgets, according to Kathryn Jurgensen, president of Premier Meetings, a planning company in Irvine.

“The bottom didn’t fall out in 2003,” Jurgensen said. “We see improvement but not a steep increase (in business).”

Surveys from the National Business Travel Association and American Express found that companies still are expected to be cost conscious this year, with about 80% of companies saying they plan to use low-cost airlines and mid-priced hotels for business travel.

At the Southern California Tourism Outlook Conference in Long Beach in December, Ahlers of the Anaheim convention bureau cautioned that corporate demand is critical to the region’s success.

“Corporate America needs to spend for this industry to get better again,” Ahlers said.

Strong Group Bookings

In recent weeks, hoteliers at the county’s largest meetings properties say they’ve seen a noticeable uptick of inquiries and that group bookings for the first part of 2004 are strong.

“Corporate meetings are increasing,” said Jeff Protzman, general manager of the Doubletree Anaheim/Orange County. “It’s our biggest share of (group) bookings even into the second and third quarter.”

But Jurgensen said her company had two cancellations after the federal government raised the terror threat level to orange.

“Some companies have a policy not to fly if the code is orange,” Jurgensen said.

A Jan. 9 report from Pricewaterhouse-Coopers LLP found that publicity surrounding the government’s decision to raise the terror alert level caused U.S. hotel occupancy to fall between 1% and 1.5% — about 25,000 room nights per night — between Dec. 21 and Dec. 27.

Hoteliers can’t control the terror threat index. But predicting how many rooms a convention will book has become tougher.

Attendees increasingly choose Internet specials and book their own rooms at hotels other than those providing group rates for conventions. That makes it difficult for the city and hoteliers to track the economic impact of any given convention.

Another issue for hoteliers is that associations — which make up about 80% of Anaheim’s convention business — have seen attendance numbers shrink since 2001.

Ahlers said the bureau’s overall sales inquiries are up 18%, and convention bookings are 11% higher from a year earlier. But the number of rooms planners expect to fill is down. Room-night projections fell to 977,000 in 2003, versus 1.7 million in 2002, though convention attendance still topped 1 million.

“It’s a problem for all of us in the industry,” Ahlers said.

According to Los Angeles based PKF Consulting, the Anaheim area had a “strong performance” for its hotel rooms last year compared to other submarkets in Southern California and is expected to grow by 2% in 2004.

And OC’s average hotel daily rate, at $98.62, still is below Los Angeles’ $113 and San Diego’s $137—a competitive advantage for some groups.

Despite intense competition, many things work in favor of Anaheim and Orange County as a convention destination.

For starters, it’s considered a “second-tier” meetings market — a sector that has gained favor since the Sept. 11, 2001, terrorist attacks. And cities such as Anaheim, Huntington Beach and Irvine consistently get high marks as safe cities, based on FBI crime statistics. Those are major pluses in today’s travel climate.

“We all share responsibility for safety and security in our tourist venues,” said Dave Wiggins, founding president of the Southern California Safety & Security Association. “The industry needs to protect itself and facilitate business.”

Having several regional airports within an hour’s drive of Orange County is a huge advantage for the area, said Jurgensen of Premier Meetings.

In 2003, passenger numbers at Ontario, Burbank, John Wayne, Long Beach and Palm Springs airports increased, while traffic at Los Angeles International declined.

“That suggests a change in the source markets and in travel patterns,” said Michael Collins, executive vice president of LA Inc. — The Convention and Visitors Bureau.

Another factor in OC’s favor is its hotel inventory of about 55,000 rooms, which includes 8,500 in walking distance of the Convention Center — something planners look for today.

The addition of new resorts, such as Hyatt Regency Huntington Beach Resort & Spa, Balboa Bay Club and Montage Resort & Spa Laguna Beach, along the coast gave OC another boost last year. Those resorts give larger groups a choice on the coast that wasn’t possible in the past.

“Thank goodness for Disney and the new resorts,” Ahlers said. “They’ve been a real shot in the arm in 2003.”

The Disneyland Resort’s proximity to the Convention Center has conventioneers thinking family vacation, too.

“People are multi-tasking today,” said Kimberly Reed, director of events for the California Trucking Association, which will hold its convention in Anaheim in the fall..

The uncertain corporate market and intense competition from neighboring areas such as San Diego, Los Angeles, Long Beach and Las Vegas turn up the pressure on OC to fill convention space.

“We research every group that uses 1,500 room nights or more,” Ahlers said.

So does every other convention city.

But there are few new groups to target.

The number of large associations has remained stable in recent years, while convention facilities have multiplied. That means existing groups have more choices of destinations, while cities struggle to find increasingly innovative ways to lure — and retain — group business.

Las Vegas is targeting groups scheduled to come to Southern California in a bid to increase its own business by as much as 25%, according to Reint Reinders, president and chief executive of the San Diego Convention & Visitors Bureau, speaking at the tourism outlook conference.

“Las Vegas is a threat for those of us who have big conventions,” Reinders said.

He cited an example of one group that was offered free space at Mandalay Bay Resort and Casino in Las Vegas if it would move its 2006 convention from San Diego. Though San Diego was able to retain that meeting, it illustrated the intensity of competition today.

“The new normal is constant change,” Reinders said.

Change is partly dependent on outside markets, too.

Southern California is likely to see more visitors from key feeder markets like Chicago, New York, Arizona, Nevada and Oregon this year, according to Jack Kyser, chief economist for the Los Angeles Economic Development Corp.

Kyser told attendees of the Long Beach outlook conference that the economic upturn seen in the third quarter of 2003 was more than just consumer confidence. “We’re looking for 4% growth in 2004,” he said.

International markets, too, are expected to grow again, partly due to the decline of the dollar overseas. Projections from Mexico, Canada, Japan, the United Kingdom and Germany are positive.

“It’s one of the brightest outlooks in a long time,” Kyser said.

Nevertheless, there still are indications that groups are staying closer to home and will continue to do so through 2004.

“An analysis of airline tickets shows we’re missing the long-haul market,” said Skip Hull, vice president of San Diego-based CIC Research Inc., which conducts visitor studies in the region.

“If you lose long-haul, you lose your high-value visitor,” he said. Long-haul visitors tend to spend more per day during their stay, he said.

Fortunately for OC, about 21 million people live within a day’s drive of the county — and that market still is heavily targeted for meetings and conventions, as well as leisure travel.

Disney Institute: Happiest Classes on Earth

The Disneyland Resort introduced a Disney Institute professional development program this month for groups meeting at the company’s parks.

The programs, which showcase Disney management practices, have been a popular fixture in Orlando for several years. Now, programs have been tailored to the West Coast.

The decision to launch West Coast-only programs stemmed from the number of groups that alternate meetings between Florida and California, said Joann Delgin, director of resort sales and services at the Disneyland Resort.

“We wanted to be able to offer them different opportunities on both coasts,” she said.

Programs range from 90-minute presentations to three-hour workshops and include topics such as nurturing a creative culture, innovation and quality service. Disney Institute participants can add a team-building scavenger hunt dubbed Pluto’s Pursuit in either of the Disney theme parks.
 

Sandi Cain is a freelance writer and contributor to the Orange County Business Journal and meetings industry publications. She specializes in hospitality, tourism and travel. Cain holds bachelor’s and master’s degrees in education from Kent State University in Ohio, where she majored in social studies. A former high school teacher, she has written for niche-market sports publications in the U.S., England and Australia and formerly worked in both the printing and high-tech industries. A Cleveland, Ohio native, Cain hasbeen a resident of Laguna Beach since the late ’70s. She enjoys travel, gardening, reading and spoiling her three cats.
.

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Contact:
Sandi Cain
Laguna Beach CA
949-497-2680
scainado@earthlink.net

Also See Hotels, Theme Parks in Orange County, California Start Aggressive Push for In-State Visitors During Holidays / Sandi Cain / November 2003
An Oranges to Oranges Comparison; Anaheim and Orlando Share Tourism and Meeting Destination Bent, Differ in Some Areas / Sandi Cain / August 2003
New Coastal Resorts Helped Orange County, California Post Gain in Hotel Rooms / Sandi Cain / August 2003
Orange County California Hotel Building Remains Sluggish; Bright Spot: the Burgeoning Resort Market along OC’s Pacific Coast / Sandi Cain / July 2003
Sunstone Hotel Investors LLC and Tarsadia Hotels Expanding by Going After Weaker Hotels in Key Markets / Sandi Cain / June 2003
Orange County's Travel Agencies Continue to Suffer from a Downturn in Travel / Sandi Cain / May 2003
Hoteliers Worry as War, Economy Hit Bookings; A Weak Tourism Industry Threatens to Get Weaker / Sandi Cain / April 2003
Budget Ax Threatens Orange County's Tourism Comeback / Sandi Cain / February 2003
Pacific Islandia California Inc., Owner of the 489-room Sheraton Anaheim Hotel, Files for Bankruptcy Protection; Bankruptcy Over Dispute, Not Results / Sandi Cain / February 2003
Security Detail; High-Profile Meetings Have Police on Special Alert / Sandi Cain / January 2003
New Hotels, Remodelings Spur Growth in Orange County Meeting Space Amid Slow Recovery / Sandi Cain / January 2003
Security Detail; High-Profile Meetings Have Police on Special Alert / Sandi Cain - January 2003
Tarsadia Hotels Building Residence Inns in Garden Grove, San Diego, Buys the 201-room Crowne Plaza in Las Vegas / Sandi Cain / Dec 2002
Bucking Convention - Anaheim Center Expansion Seems to Pay Off as Other Cities Struggle / Sandi Cain / Nov 2002
Ayres Breaks Ground on L.A. Hotel, Expanding Two Others / Sandi Cain / Oct 2002
Orange County California's Hotels, Convention Center Upbeat Despite New Competition and Weak Economy / Sandi Cain / Aug 2002
Ritz, Surf & Sand, Vie With Beach Resort Newcomers Along California's Orange County Coast; Almost 1,000 rooms Set to be Added / Sandi Cain / Aug 2002
Orange County California's Hotels, Convention Center Upbeat Despite New Competition and Weak Economy / Sandi Cain / Aug 2002
Montage Founder, Alan J. Fuerstman Sees Big Things for Laguna Colony Luxury Hotel, Acquired from Marriott International for $190 million / Sandi Cain / July 2002
Orange County’s $6 billion Annual Tourism Industry Shaking off the Downturn / Sandi Cain / May 2002
The Orange Riviera - New Luxury Hotels and Renovation Projects Transforming OC’s Coast / Sandi Cain / May 2001 
Orange County Hoteliers Hope for a Solid Summer Season to Regain Momentum / May 2002 / Sandi Cain
Hotel Brokers: From Sales to Consultants / Sandi Cain / Jan 2002 
Tourism Officials Focus on Security of Events and Sites as Key to Attracting Visitors / Sandi Cain / Jan 2002 
Orange County Travel Agencies Bear Brunt Last Week, Waiting For Fallout / Sandi Cain / Sept 2001 
St. Regis Monarch Beach Resort & Spa Opening Adds to Competition in South Orange County California / Sandi Cain / Aug 2001 
The Orange Riviera - New Luxury Hotels and Renovation Projects Transforming OC’s Coast / Sandi Cain / May 2001 
Ayres Hotel Group Expands, Rebrands / Sandi Cain / March 2001
Orange County’s Hoteliers Relieved as Anaheim Convention Center Expansion Boosted Occupancy and Rates During Past Year / Sandi Cain / May 2001
Indomitable Disney / Bad News Doesn’t Tarnish the Mouse; Slowing Economy Another Matter /  / Feb 2001 
Orange County Hotels Poised for Meetings Growth; Newcomers Help Bolster Total Space; Disneyland Hotel Still No. 1 / Sandi Cain / Jan 2001 


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