Room for business
Aung Oo wandered the colorful halls of his newest property, South Lake Tahoe’s Fantasy Inn, Wednesday. He eyed the ceiling-mounted mirrors, the hanging television sets and the circular beds beginning to sag in the center.
“There are no shower doors,” he said, pointing to the tiled open tub meant for lovers who rent the Inn’s Marie Antoinette room. “It’s not good for families.”
Oo bought the old hotel a few months ago and is planning to change the name and undertake a major remodel. Yes, that means the heart-shaped bathtubs and the gratuitous romantic decor made famous in the raunchy 1984 ski comedy “Hot Dog … The Movie” will have to go.
Though sad for those fond of the South Lake Tahoe landmark, Oo’s purchase of the hotel is a sign of the positive trend in commercial real estate. Sales of lodging properties are up not only in South Lake Tahoe, but also nationwide.
Lloyd Aronoff, a South Lake Tahoe real estate broker who specializes in lodging property sales, said he’s been busier lately.
“I think some people are feeling more optimistic about the economy,” Aronoff said. “It was pretty slow the last two to three years. I think the prices are better and that’s what’s attracting buyers.”
Aronoff has sold several hotels and motels in recent months, he said. The commercial real estate listing site mlslisting.com shows at least 13 lodging properties currently for sale in Stateline and South Lake Tahoe.
Nationally, an increase in the sale of hotel properties has been noticed by the National Association of Realtors. In 2011, about $19.6 billion in hotel properties changed hands, up from $12.2 billion in 2010, according to George Ratiu, manager of quantitative and commercial research for NAR.
In 2009, the sales of hotels bottomed out with only about $3 billion in properties being sold, down from a high in 2006 of nearly $30 billion, Ratiu said.
“Part of the reason for that is tourism took quite a hit in 2009,” he added. “Obviously, that was the low water mark.”
Now, with low prices and a boom in foreign tourism due to the low value of the U.S. dollar compared to other currencies, buyers are seeing hotels as a smart investment, Ratiu said.
At 53 rooms, Fantasy Inn is the largest of Oo’s three hotels, but it has the lowest occupancy rate. Of course, his other hotels, one in San Luis Obispo and one near Yosemite, don’t have the stuff of fantasy, the tiger-striped carpet, the marble pillars or the in-room fireplaces.
Oo hasn’t decided on a new name. He knows he still wants to appeal to wedding parties, but it’s no longer practical to only offer the fancy rooms and suites meant for newlyweds.
“It limits the demographics of the guests we attract,” said general manager Kathy Winter. “We’ve got to do what’s going to make us money.”
With hopes of capturing some of the summer visitor boom, Oo will start his remodel as soon as the permits are in place.
“I will preserve this room,” Oo said, taking another look around the royal suite. “But I will add a shower door.”