Report: California hotel occupancy plummets after attacks |

Report: California hotel occupancy plummets after attacks


LOS ANGELES (AP) – Hotels across California saw some of the lowest occupancy rates in a decade after the terrorist attacks and have moved quickly to lay off workers and retool marketing plans, industry officials said Tuesday.

Hardest hit were hotels in San Francisco and Anaheim, where occupancy dropped by about half from the same period last year to 42 percent for the week ended Sept. 22, according to an analysis by Ernst & Young Hospitality Group.

Los Angeles also saw a steep drop, with occupancy rates falling by about one-third to 53 percent.

The empty rooms have hotels cutting their work force and scrambling to revise marketing plans to attract locals for weekend getaways instead of jittery air travelers from out of state.

”People can drive, and they still want to do things,” said Ernest & Young hotel industry consultant Jeffrey Dallas.

Many hotels have resorted to layoffs to balance their books. Between 25 percent and 40 percent of hotel union members in the state have been laid off or had hours reduced, union officials said.

”It’s been devastating,” said David Koff, senior research analyst for the Hotel Employees and Restaurant Employees International Union. ”I expect it’s happening less at unionized hotels, where there are protections in place for workers, than at nonunion hotels.”

About 207,000 Californians were employed by the hotel industry at the end of August, with an annual payroll of about $3.7 billion.

San Francisco and Anaheim were hurt more than other cities because the falloff came during the busy convention season. Los Angeles does not book as many big meetings and group events in September, Dallas said.

The decline compounded existing problems in San Francisco, where hotels already had seen demand slow as a result of the demise of many dot-coms.

”The economy was soft before but this really had a tremendous effect on us,” said Roxy Stone, director of sales and marketing for the Grand Hyatt San Francisco.

San Francisco hotels could take longer to recover than those in Southern California because the city relies more on visitors who travel by plane, Dallas said.

By contrast, Anaheim and Los Angeles are in a better position to cash in on regional business and auto travel, he said.

Despite cancellations in September, most conventions scheduled in California through the end of the year are expected to take place and aid hotel occupancy and revenue, Dallas said.

”The bookings for conventions appear to be holding,” he said. ”But there is still a period of uncertainty ahead.”

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