We’ve moved! Check out our new website at www.lbbizjournal.com
Hospitality And Tourism Industry Execs See Positive Growth

Evolving Attractions And Facilities Boost Outside Interest

By Samantha Mehlinger - Staff Writer

June 17, 2013 - Perhaps the two greatest indicators of growth in hospitality and tourism are boosts in spending and employment. Overall, visitors to California spent $106.4 billion last year, according to the California Chamber of Commerce (CalChamber). Nearly one million jobs have been generated by tourism within the state. In all, the travel industry added $48.8 billion to California GDP last year.

On a local level, Los Angeles County saw $23 million in visitor spending in 2012, Cal Chamber reports. The leisure and hospitality industry continues to post strong job gains in the Los Angeles-Long Beach-Glendale Metropolitan Division, according to the California Employment Development Department (EDD). From March to April, 2,600 jobs were added.

Ten years ago, Aaron Levant launched what has become a disruptive
model for a lifestyle fashion tradeshow in Long Beach, AGENDA.
Today, the tradeshow attracts more than 10,000 buyer attendees
over two days seeking the latest in California lifestyle apparel
from independent and major name brands. Levant, here with Long
Beach Area Convention and Visitors Bureau President/ CEO Steve
Goodling, will host the second AGENDA show of the year in Long
Beach July 25 and 26.
(Photograph by the Business Journal’s Thomas McConville)

HCVT - Certified Public Accountants

Kimberly Ritter-Martinez, an economist with the Los Angeles County Economic Development Corporation (LAEDC), says the hospitality and tourism industries in L.A. County are “the largest and most visible” sectors of the local economy. “Leisure and hospitality was one of the very first industries that recovered to full employment following the recession,” she says.

“In April, we saw a 3.8 percent gain in leisure and hospitality jobs over the year,” she continues. EDD’s monthly employment report shows that from April of 2012 to April of this year, nonfarm employment increased 2 percent in the greater Long Beach area. Thus, Ritter-Martinez explains, leisure and hospitality are “actually growing faster in terms of employment than the labor market as a whole.”

The welfare of the hospitality sector can be gauged by changes in hotel occupancy and average daily room rates (ADR). Higher ADR and occupancy represents increases in demand. Bruce Baltin, senior vice president at Colliers PKF Consulting in Los Angeles, which conducts hospitality industry research, says both occupancy and ADR are increasing in Long Beach.

Baltin shares some of PKF’s research findings for the first quarter of this year with the Business Journal. “Through the first quarter, L.A. County occupancy was up about 2 percent and the average room rate was up about 5 percent,” he says, noting the gain is measured against last year’s first quarter.

So far this year, Long Beach has the jump on L.A. in terms of occupancy growth, posting an increase of 8.1 percent. ADR has increased by 3 percent. “Long Beach is actually having a pretty good start to the year,” he comments.

Both Ritter-Martinez and Baltin believe improvements and additions to city attractions and facilities are positively impacting the industry. Baltin thinks “the improvements to the convention center have to be helping.” He remarks, “They’re doing a nice job there in the center, in terms of renovating and refurbishing it.”

Citing these improvements, as well as those to the Long Beach Airport, Ritter-Martinez assesses, “A big part of attracting visitors to the region is having infrastructure in place.”

All things considered, both Ritter-Martinez and Baltin believe the industry’s future in Long Beach is bright. Baltin summarizes, “All the indications are that at least for the next several years, we should continue to do pretty well.”

Convention Center Upgrades Bring In Business

From LAEDC’s Ritter-Martinez to hotel managers like the downtown Hyatt Regency’s Stephen D’Agostino, the Long Beach Convention & Entertainment Center is frequently referenced as a force for growth in the city’s hospitality and tourism industry.

Upgrades to the center, like the new lounge area and restaurant Bogart & Co., seem to be creating a bigger draw for businesses and conventioneers. Steve Goodling, president and CEO of the Long Beach Area Convention and Visitors Bureau (CVB), says the comfortable, networking-conducive additions contrast with most convention centers, which are typically “very utilitarian.”

A system of curtains and rigging will create an adaptable space in the Long Beach Arena, able to transform its size from that of a large sporting arena to a ballroom. “The clients are responding very positively because, in essence, it’s a special event space that you can tailor to whatever you want your event to be,” Goodling says.

The renovations are cost effective because the new technology eradicates the need for conventioneers to hire additional labor, apart from perhaps lighting designers, Goodling emphasizes.

The convention center is managed by SMG, with Charlie Beirne as general manager. Beirne says that out of the 275 buildings managed by SMG around the world, the upgrades to the arena are the first of their kind. Construction is set for completion by October. “We’re on target, which is great. No major hiccups. And I don’t anticipate any,” Beirne says.

Goodling says the renovation has already brought significant business to the center and city. “We’re up to approximately $18 million in economic impact,” he says. That’s up from a previous estimate of $6 million. Several large conferences are on the books due to a combination of interest in the revamped facilities and help from city leaders. For instance, Goodling says, “Supervisor Don Knabe helped us get the National Association of Counties,” in 2016. The conference will bring 3,000 elected officials from the United States to Long Beach, totaling $2.3 million in estimated economic impact (EEI).

The CVB also has some help from the airport. “Mario Rodriguez, our airport director, helped us bring in the National Agricultural Aviation Association, which is a really large group,” Goodling says. The conference is slated for 2016, with 1,600 attendees and $1,240,000 in EEI.

The Intermodal Association of North America is set for 2014, with 2,500 attendees and $1,937,500 EEI. The largest convention by far is LifeVantage in 2014, with 6,000 attendees and $4,650,00 EEI.

In addition to large conferences, Beirne believes, “short-term business is going to explode,” potentially even doubling or quadrupling.

Better business at the convention center brings in more people to downtown hotels, which D’Agostino says allows the Regency to bring up room rates. “We were able to do that more this year than last year because the convention center has been busier,” he explains.

D’Agostino goes so far to say, “We really live and die by the convention center in this city, so that’s why we depend so much on the convention bureau and all their efforts.”

A soft opening for the finished arena takes place November 20, co-hosted by BizBash Magazine, a publication for special events. Beirne says BizBash CEO David Adler believes the arena is “cutting edge” and “will change the way people view convention centers.”

Hospitality Industry Sees Modest Uptick In Occupancy, Room Rates

The hospitality industry in Long Beach is faring well, according to statistics provided by Collier’s Baltin. First quarter results show hotel room occupancy at 73.5 percent, up from 68 percent in 2012. Average daily room rates (ADR) are up three percent year-over-year in the first quarter.

The growth is a pleasant outcome, considering darker expectations at the end of 2012. Mac McCann of the Residence Inn by Marriott sums it up: “I know with the government sequester looming earlier on in the year, we were concerned. But the economy is alive and well.”

Overall, managers of local hotels reached by the Business Journal report increases in occupancy. John Jenkins, hotel manager at what is perhaps Long Beach’s most recognizable tourist destination, the Queen Mary, reports a two percent increase this year. Last year, on the other hand, occupancy rates were “mainly flat.”

Regency’s D’Agostino says he is “seeing a large uptick” in occupancy, but construction that took 250 rooms out of inventory for a few months in 2012 may account for the jump. Still, he says his “gut feeling” is that occupancy is “a little better” this year.

Marc Choplick, general manager at the Westin Long Beach in downtown, says in an email to the Business Journal that he continues “to see occupancy growth this year” and projects “continued growth year-over-year.”

The new Courtyard by Marriott Long Beach opened in March at Douglas Park, adjacent to the airport. Lucas Fiamengo, general manager, is thus far pleased with how the hotel is faring. “I would say we’re meeting and exceeding expectations,” he says of occupancy in the 159-room hotel. “For the foreseeable future, we certainly expect a very strong summer.”

Fiamengo explains that ADR also fluctuates by season. “I’d be comfortable saying customers would expect to see higher rates from us in the coming moths,” he says.

Summer tourism will certainly impact the Queen Mary, according to Jenkins, who projects a “slight increase” in ADR. Choplick anticipates an increase as well. “Room rates are up year-over-year and we see no reason that this will not continue going forward,” he states.

D’Agostino says the Hyatt is seeing an uptick in ADR “just due to the compression caused by the convention center.” He continues, “I don’t have the exact numbers, but I think it’s close to a record year for the convention center.”

Choplick provides a similar insight: “The CVB has worked very hard and successfully in marketing the city and creating that exposure.” Additionally, Jenkins says the CVB has a direct impact on the Queen Mary’s success because it includes the ship in tours.

While ADR continues to rise, the hospitality workers’ “living wage” proposition, Measure N, may have some impact on hotel revenues. The measure mandates hospitality workers be paid $13 per hour, plus benefits, at hotels with more than 100 rooms. At this point, Baltin is unsure of how the measure is impacting hotel revenues.

Some managers, like McCann, echo Baltin’s uncertainty. “Time will tell,” he says of the measure’s fiscal impacts. Choplick, on the other hand, emphasizes that the measure “directly impacted revenues.”

The Queen Mary, Hyatt and Westin are all undergoing upgrades. An expanded pool deck, refurbished meeting rooms and guest rooms are complete at the Hyatt. Next, the lobby and restaurant will be upgraded to be more technology friendly.

At the Westin, similar renovations to the pool and meeting spaces will be finished by 2014, says Choplick, and a fitness center upgrade will be done by September.

The Queen Mary recently refurbished 32 hotel rooms. Jenkins is excited to report that the historic ship is in the process of taking original items out of storage and reincorporating them back into the design.

Apart from the airport’s Courtyard by Marriott, the city has seen little construction of hotels in recent years, which Ritter-Martinez says is a trend within the greater county. However, eight new hotels are under construction countywide, with 11 planned in the next two years. “The fact that we’re starting to add more hotels to accommodate a growing number of visitors is the most positive sign we’ve seen in the industry since the recession,” she assesses.

All things considered, the hospitality industry in Long Beach is looking toward steady growth. Ritter-Martinez says “the large number of quality lodging facilities in Long Beach” continue to make the city an “attractive area for visitors.”

Attractions Expand Exhibits And Events

Long Beach’s two biggest tourist attractions, the Queen Mary and the Aquarium of the Pacific, report 2013 is proving to be a good year. The number of visitors to the attractions appears to be increasing as both venues continue to expand their events and exhibits.

The historic Queen Mary, a permanent fixture of Long Beach’s waterfront, has evolved quite a bit in the past few years. New management by Evolution Hospitality has added a host of new events. “In the past year, certainly our two biggest successes in terms of our events and attractions would be Diana, Legacy of a Princess, and naturally CHILL, our winter event,” says Brian Luallen, director of attractions.

Luallen reports the new lineup helped create a significant increase in visitors from 2011 to 2012. The Queen Mary’s exhibits and tours have brought in 120,000 guests so far this year.

The year continues to look promising, with a little help from a princess. “The Princess Diana exhibit certainly will be the model for any of our future growth and expansion and refurbishment of existing exhibits,” Luallen remarks. Since opening, over 20,000 people have visited the exhibit. It is contracted for five years. Displays will continue to fluctuate in that time, with a new assortment of dresses coming in the fall.

The Queen Mary’s tours are also important revenue sources for the ship. Several paranormal tours are available in the evenings, and historical themed tours run during the day. The Ghosts and Legends tour is currently undergoing an overhaul worth hundreds of thousands of dollars for “brand new cutting edge special effects.” The spooky tour has been in place since 1997.

A major upcoming event is the All-American Fourth of July. The event features a celebration of America through the decades of the 20th century. The ’90s, for instance, will be commemorated with a viewing of the film “Independence Day” before what Luallen promises to be “easily the largest fireworks display in the area.”

The Aquarium of the Pacific, celebrates its 15th anniversary this year with a theme of ocean exploration. The Ocean Conservation Awards Gala on June 15 honored explorers Sylvia Earle, Don Walsh and Walter Munk.

Jerry Schubel, president and CEO, says the Aquarium is hosting a major national forum for ocean exploration in July. The forum is sponsored by the National Oceanic and Atmospheric Administration, NASA, the U.S. Department of Interior, the U.S. Department of State, the National Science Foundation “and a variety of institutions in the private sector such as Google, Esri, National Geographic and a number of others,” Schubel lists.

He says the event “will bring to Long Beach, for a period of three days, 100 of the greatest living explorers from the United States.” On Sunday, July 21, the Aquarium presents “Explorers Day,” an event open to the public.

According to the Aquarium, “Guests will have the opportunity to meet and hear from historical and modern-day ocean explorers, see demonstrations of remotely operated vehicles (ROVs) under water, and watch live video feeds from three deep-sea exploration vessels. NOAA, NASA, and other agencies and organizations engaged in ocean exploration will feature educational booths at this event. Kid’s activities, including guest appearances by the BBC children’s television series Octonauts, will be included throughout the day.”

Aquairum exhibits, in keeping with the theme, include replicas of a deep-sea hydrothermal vent, complete with tubeworms, and a whale fall, an ecosystem created when a deceased whale falls to the ocean floor.

Thus far, membership remains steady this year at about 35,000 membership households. Although retail sales were “a little bit off” while the two retail spaces were under construction, Schubel expects now that they have opened, the Aquarium “will increase our retail revenues by the end of the year.”

Last year, the Aquarium drew 1.5 million visitors. Schubel projects this number will increase to about 1.6 million this year.

The Harbor And Waterfront

The Long Beach waterfront is seeing a boost in traffic and tourism, partially driven by investments from Carnival Cruise Lines. This year, Long Beach welcomes a new Carnival ocean liner, the Carnival Miracle. The Miracle expands Carnival’s services with 15-day round-trip cruises to Hawaii in April, October and December.

These cruises will continue during the next two years, with trips already scheduled for January and December of 2014 and January of 2015. “The April voyage to Hawaii aboard Carnival Miracle performed very well and advance bookings are favorable for all of the upcoming departures,” says Vance Gulliksen, Carnival spokesperson.

The Miracle now provides cruises to the Mexican Riviera out of Long Beach. The inaugural Riviera trip in May “generated high guest satisfaction ratings,” says Gulliksen. He confirms plans for another “full season of Mexican Riviera cruises that will continue through April 2014,” starting this October. Yet another full season of these cruises will run on the Miracle from October of 2014 to April of 2015.

Carnival is adding a third ship to its Long Beach operations in 2014. Gulliksen says demand “necessitated adding” the ship, called the Carnival Imagination, which will operate three-day and four-day cruises to Ensenada, Mexico, and Catalina Island.

Daily travel to nearby Catalina Island is available via Catalina Express, which operates eight vessels out of Long Beach, San Pedro and Dana Point. The vessels have a combined capacity of 2,100 people, says Elaine Vaughan, vice president of marketing and sales. The daily number of passengers may total more than that, she says, because “a boat can go over to the island two or three times a day.”

So far this year, Vaughan says the company is experiencing “just a pinch” of growth in ridership. Currently, Catalina Express is offering year-round packages in conjunction with hotels in Avalon in celebration of the city’s centennial. “People are very interested in Catalina Island, in Avalon and its history,” she remarks. The company is gearing up for the summer season, during which it can operate up to 30 trips per day.

In the summer, Long Beach Transit (LBT) offers water taxi services for residents and visitors looking to traverse the local waters. Because the summer has just begun, Kevin Lee, media representative for LBT, says AquaBus’ and AquaLink’s 2013 ridership estimates are not yet available. But from 2011 to 2012, ridership increased 36 percent.

“As the economy continues to improve and more people are taking vacations, and even ‘staycations,’ as they call them, we’re hopeful that number will continue to increase,” Lee says of what he calls the “huge” jump in riders. Typically, water taxi services begin Memorial Day weekend, but this year LBT began operations during Gay Pride weekend. He estimates “hundreds of people” used the water taxis that weekend.

Lee says the Passport bus route serving downtown, the Queen Mary, Aquarium and the waterfront is also faring well. “From February 2012 to February of this year, the bus service experienced a 10 percent increase in ridership,” Lee states, noting that the route is free.

“Recently we’ve made a lot of strides in creating a cleaner and quieter passport route,” Lee emphasizes. In August of 2012, LBT switched from diesel fuel to compressed natural gas. Another change may be coming soon. Lee elaborates, “In 2014, we’re looking at putting all electric buses on that route.”

Long Beach Airport Upgrades Receive Accolades

The Long Beach Airport (known by its call tag, LGB) continues to undergo development after revealing its $45 million concourse in December of last year. In addition to roomier waiting areas, the concourse offers outdoor seating with fire-pits and includes local concessionaires like Sweet Jill’s and George’s Greek Café in place of the usual chains.

The California Transportation Foundation recognized the concourse on June 14 with the 2013 Aviation Project of the Year Award. “In most cases, when you hear the word airport, you don’t get a good connotation,” says Mario Rodriguez, airport director. “But this airport is something out of the norm.”

Plans are underway to improve the baggage claim, an outdated parking structure and signage. A new auto rental center is also in the works. Rodriguez says the changes aim to make “the experience for the passenger a lot better.”

If the new amenities aren’t appealing enough for travellers, LGB offers the lowest rates in the state and the second lowest in the country. LAEDC’s Ritter-Martinez says the low cost and user-friendly upgrades help boost travel to Long Beach.

Rodriguez states that the airport has a total of 38 air carrier slots and two additional slots for UPS and FedEx. JetBlue holds about 32 of these. Delta, US Air, Alaska Airlines and local carriers take up the rest.

While LGB has a cap of 41 flights daily, Rodriguez says load factors – the number of passengers on individual flights – “are huge.” He says the trend of “fewer flights, fuller planes,” is one occurring nationwide due to the lessening number of airlines.

The total number of passengers going through LGB so far this year "appears to be below last year’s,” Rodriguez states. LGB’s April 2013 activity report shows a 10.1 percent year-over-year drop in enplaned passengers and a 9.8 decrease in total passenger traffic.

Still, he says the numbers “are way above the 2008 numbers that we use for a benchmark.” And compared with the Ontario Airport, LGB is doing just fine. The Los Angeles Tourism Industry Performance Report for 2013, issued by the Los Angeles Tourism and Convention Board, shows Ontario lost about 33 percent of traffic from April 2012 to April 2013.

Currently, LGB has about a year’s worth of cash reserves, meaning LGB could survive for a year without any revenue. Luckily, that is not necessary. “Financially, we’re doing very well,” Rodriguez remarks.