Slow Business Continues for Newport Beach Hotels

It may come as no surprise to many, but hotels in Newport Beach have certainly seen better summers. The tanking economy and the sluggish real estate market have greatly affected local tourism, making the last summer one of the slowest the hotel business has seen in decades.

PKF Consulting, a company specializing in hospitality research, reported that room rates for Orange County hotels fell 16% in the 12-month period ending July 2009. Despite the drop, however, over 21% of their rooms went empty throughout the summer-up significantly from 16.67% last year.

Newport Beach, one of O.C.'s top tourist spots, had one of the highest empty room rates in the county. The “revpar”-a measure tracking a hotel's cash flow, rates and occupancy-for the city was down a whopping 30% this year, even as some hotels have cut rates by as much as 24%.

Room rates ranged from $91 to $247 a night, averaging $138 for the county and falling 16% compared to last year. Newport Beach costs were slightly above average, with rooms going for about $150, although rates had been sharply cut during the period.s

Occupancy was also down for most of the county. In Newport Beach, only 76.1% of hotel rooms were occupied for much of the season-a 9% drop from last year's rates. The biggest occupancy drop was in Southern O.C., falling 12% with only 68% of rooms occupied.

Countywide, revpar went down 20.6% this year. Of the seven divisions the PKF assigned for the study, only one saw a year-over-year increase in room rate, only one also had occupancy increases, and none experienced a revpar increase.

 

Earlier in Newport Beach Real Estate News:
Newport Beach Home Prices Up Over Year
Newport Beach Among O.C.’s Slowest Markets
Newport Beach ZIP Sees Sales Spike as Prices Plunge