Long Beach Works To Keep Things Fresh
By Tiffany L. Rider - Assistant Editor
and Samantha Mehlinger, Staff Writer
December 17th, 2013 – Los Angeles County’s leisure and hospitality industries continue to lead other sectors in job growth, according to the California Employment Development Department. From October 2012 to the same month this year, these industries added 18,500 jobs in the Los Angeles-Long Beach-Glendale Metropolitan area alone.
Kimberly Ritter-Martinez, an economist at the Los Angeles Economic Development Corporation, told the Business Journal that the leisure and hospitality industries “added back all of the jobs and then some that were lost during the recession.” She cautions, however, “Within the leisure and hospitality sector, the strongest job gains have been in eating and drinking establishments,” rather than in hotels and attractions.
Steve Goodling (left), president and CEO of the Long Beach Area Convention &
Visitors Bureau, and Charlie Beirne, general manager of the Long Beach
Convention & Entertainment Center, show off the new Pacific Ballroom at the
Long Beach Arena. Decorative globes and surrounding curtains demonstrate
the new lighting and rigging capabilities built into the arena, which have
the potential to save event planners big bucks on hiring outside companies
for those services.
(Photograph by the Business Journal’s Thomas McConville)
Even so, tourism to the state and to L.A. County continues to increase. A recent report by Tourism Economics for Visit California, a nonprofit organization that markets California as a tourist destination, estimates that overall visitor volume should increase by 2.4 percent from 2012 to 2013 by year’s end.
“What we’re seeing is that the fundamentals continue to be in place that support growth in the tourism industry,” Ritter-Martinez said, citing “strong growth in corporate profits” and stronger personal income growth. “We have 10 new hotels under construction in Los Angeles County, which is a really positive sign. Obviously, if they are building that many new hotels . . . the industry is anticipating even better growth coming up,” she added.
Major tourist gateways to the City of Long Beach are primed for this growth, now that the Long Beach Entertainment & Convention Center and the Long Beach Airport both recently completed major upgrades. Major and minor cruise lines continue to expand service in Long Beach, while attractions are beefing up their event lineups.
Lodging Forecast Predicts Hotel Occupancy To Remain Flat In 2014
Overall market strength and the ability to plan ahead – knowing that convention bookings are lower for 2014 – should keep hotel occupancy essentially flat through the coming year.
According to his 2014 Southern California Lodging Forecast report, PKF Consulting Senior Vice President Bruce Baltin told the Business Journal that hotel occupancy is forecasted at 74.5 percent, essentially flat from 2013. Room rates should increase on average by about 5 percent next year, bringing the revenue per available room up about 4.7 percent next year, Baltin said.
“We did this forecast knowing that convention bookings are down a little bit,” he said. “In the same token, the market is very strong. We think that there is going to be compression in some of our markets next year. And also, frankly, the hotels have known for a while that the calendar is weak for this year. We’ve known for several years about the concern for the 2014 calendar. With that, I know the hotels have had some time to anticipate it and develop their own bookings.”
Stephen D’Agostino, general manager of the Hyatt Regency Long Beach at 200 S. Pine Ave. and Hyatt the Pike Long Beach at 285 Bay St., told the Business Journal that while the two properties are very different, they “celebrate the same successes and challenges as the Regency.”
The Regency property has had a strong year in 2013, according to D’Agostino. “The hotel was actually busy during Thanksgiving with a citywide group,” he said. “It typically tends to be the most difficult holiday to fill, since airlines are already very busy, so groups tend to shy away from that holiday. Additionally, it tends to be more family focused, compared to other holidays.”
The Hyatt Long Beach hotel is highly dependent on bookings and events at the Long Beach Convention & Entertainment Center for business and compression, D’Agostino said.
According to the Steve Goodling, president and CEO of the Long Beach Convention & Visitors Bureau, there is an approximately 18,500-room variance between 2013 and 2014. The Jehovah’s Witnesses booked fewer summer weekend conventions next year (about 11,000 room bookings) and the void left by the TED Conference was not filled for 2014 (7,500 room bookings).
The CVB was able to book a replacement for the TED Conference in 2015, he said – one that will have almost double the economic impact TED had on the city. Goodling noted that hotels should be able to sell the summer weekend nights to the traveling public using online platforms like Expedia and Travelocity. “We are still growing on our best year yet,” he said.
With the pace off slightly in 2014, D’Agostino said the hotel remains focused on trying to match or do better than 2013. “We really do need to try and increase our rates in 2014, since expenses continue to rise sharply; however, remaining competitive tends to hamper the strong growth we are seeing elsewhere,” D’Agostino said. “This is especially true of banquet business, which continues to decline from year to year.”
The hotel is at the final stage of its total property redevelopment, a project in effect over the past three years. The finishing touches include completing a planned renovation of the lobby, restaurant and lobby bar next year. Several other Long Beach hotels have renovations planned for 2014, including the Courtyard Downtown Long Beach hotel at 500 E. 1st St.
Silvano Merlo, the new general manager of the Courtyard Downtown Long Beach, told the Business Journal that room renovations may start as soon as next July and will take approximately 16 weeks to complete. “We are in the design phase now,” Merlo said. “It’s exciting, especially coming here as a new general manager. I have a spectacular restaurant and I am going to have a room renovation, plus soft goods and the lobby, too.”
The renovation will reposition the hotel as a more modern, contemporary space, similar to the style of its new restaurant, James Republic. The restaurant has been “phenomenal” to the overall business, Merlo said, providing catering for special events at the 216-room hotel’s 6,330 square feet of event and meeting space. Bookings are looking solid for 2014, most of which are on the weekends.
All of these factors play into the success of the hotel in 2014. “There are challenges,” Merlo said. “Next year is going to be a soft year based on the convention business being down. So it’s a perfect time for us to do a renovation. It’s going to perfectly set us up for a fantastic 2015.”
Another downtown hotel by Marriott, the Renaissance Long Beach, also has a new general manager. Pam Ryan is transitioning to the Renaissance from the Torrance Marriott at the end of this year. “Renaissance brand is all about living to discover,” Ryan told the Business Journal. “I am personally excited to immerse myself in the brand and embrace the local community. As a resident of Long Beach’s eastside, I look forward to inviting the greater community to rediscover the hotel as I embark on the endeavor.”
The Renaissance Long Beach hotel, located at 111 E. Ocean Blvd., is in the process of a major renovation, starting with modernized elevators this month, a newly designed lobby in the first quarter of 2014 and room remodels. “We are excited about 2014,” Ryan said. “Coming out of the renovation, we expect a good year – busy and healthy.”
At the Holiday Inn Downtown Long Beach, located at 1133 Atlantic Ave., business was a little slow in 2013. According to General Manager James McDaniel, more than 50 rooms were unavailable this year as the hotel underwent renovation; however, it has been “drastically” upgraded from where it was a year ago, McDaniel said.
As with most other hotels in Long Beach, room rates will increase “a little bit” at The Holiday Inn Downtown Long Beach. So far, McDaniel said, the 134-room hotel has booked 5,500 room nights for next year and counting. “We do a lot of group business based on conventions in town,” he said. “Business is pretty solid given how early we are with bookings.” The target for the hotel, McDaniel said, is 15 percent in average daily rate (ADR) growth and occupancy year over year.
Compression and overflow help support hotels away from activity downtown, including the Residence Inn by Marriott at 4111 E. Willow St. Mac McCann, general manager, told the Business Journal that the hotel had a slow start in 2013, but a much stronger second half of the year. With the government per diem – how much hospitality services are allowed to charge – up by about $10 a room in 2014, McCann said the hotel is expecting a 2 percent lift in ADR overall.
The coming year should see a slight increase for room and event bookings, McCann said, noting he is “optimistic about growth in occupancy and rate.” The hotel, which is located next door to The Grand event center, has no renovations planned for 2014.
After completing renovations that put room and event bookings slightly off pace in 2013, Long Beach Marriott General Manager Francois Porte said expectations for 2014 are high. Renovations of the restaurant and lobby area occurred from April to October, completely updating the overall hotel, including guest rooms, all meeting rooms, the grand ballroom and outdoor space, fitness center and poolside.
So far event and room bookings at the Long Beach Marriott, located at 4700 Airport Plaza Dr., are flat to last year, but the renovations should help bring in more social business, Porte said. “In spite of the projected close down of the C-17 program, we are optimistic [about] business coming to the airport area in particular because of the following: Boeing is relocating their commercial airplane engineers to the area; the Port of Long Beach headquarters is moving in next door; Mercedes Benz is establishing their distribution center at the former 717 plant; a new passenger friendly Long Beach Airport terminal will attract more travelers to the airport; and new companies are moving to the Douglas and the Airport Plaza Parks.”
Room rates are staying flat at the Long Beach Marriott in 2014, Porte said, adding that although the government per diem for Los Angeles County increased by 6.4 percent to $133, “increased rates would come from that market segment.”
Sean Maddock, regional director of operations for the property management firm Evolution Hospitality, oversees the Courtyard Long Beach Airport, the Hilton Long Beach & Executive Conference Center and The Queen Mary. While this is the first year managing the Courtyard and Hilton properties, Maddock told the Business Journal that “the revenue channels at each property have been very strong.”
Year-over-year bookings at The Queen Mary have grown in both group and short-term bookings, Maddock said. “The growth has been so consistent that earlier this year we renovated 32 staterooms that had not been used in 20 years, taking the total number of staterooms on the ship to 346,” he said. The firm is also developing a multi-year renovation plan for the Hilton property.
Though Maddock did not indicate planned room rate increases in 2014, average room rates in all market segments of Evolution Hospitality’s Long Beach assets are forecasted to increase. Overall, Maddock said he is optimistic about 2014’s group bookings pace.
The Courtyard Long Beach Airport, located at 3841 N. Lakewood Blvd., opened for business in March. According to general manager Lucas Fiamengo, the hotel has met or exceeded expectations for room and event bookings in 2013. While the hotel does not have specific plans to raise rates, Fiamengo said, “We always look for opportunities . . . based on market conditions.”
Fiamengo said the hotel’s pace for 2014 room and event bookings is strong. The 159-room hotel has approximately 2,000 square feet of meeting space, attracting smaller business meetings and leisure events.
“I’m expecting a really great year in 2014,” Fiamengo told the Business Journal. “I believe the hotel has hit the ground running. There is a need for the rooms up here. There is an incredible amount of business attributable to airport, training, and of course Douglas Park.” He also noted the new Mercedes Benz facility nearby, which should be up and running by the end of next year, as another factor for increased business next year.
Long Beach Airport Receives Accolades, Continues Improvements
While other regional mid-sized airports have suffered major traffic losses, the Long Beach Airport (LGB) is faring well in the long-term, with passenger traffic increasing by three percent from 2008 to 2013. In the short-term, however, LGB’s traffic has decreased 8.6 percent from January to October of this year from the same period last year.
Mario Rodriguez, director of the Long Beach Airport, said that the airport takes the five-year growth total into consideration when comparing itself to other local airports. Rodriguez estimated that in the past five years, the L.A./Ontario International Airport lost about 33 percent of its traffic and Burbank Bob Hope Airport lost 35 percent. “With the consolidation of the large airlines and retrenching in the bigger markets, that’s why you’re seeing such precipitous drops in regional airports,” he explained.
Load factors – a measurement of how many enplaned passengers are on each flight based on total capacity – out of LGB are “phenomenal,” according to Rodriguez. “The average load factor is around 90 percent, which means the plane is full,” he said. This figure accounts for paying customers, while the remaining capacity is filled by crew and nonpaying passengers. “Unless you strap people to the wing, you’re not getting any more passengers on board,” he said.
Currently, the airport has 371 days worth of cash reserves, meaning that “if all revenue stopped, we could operate the place for 371 days,” Rodriguez explained. “It gives us a nice, stable platform in case there are changes in the airline industry . . . The industry is so volatile. You really cannot predict it year after year,” he added.
JetBlue is LGB’s main airline, holding the majority of its 41 daily flight slots. Rodriguez said the airline is considering adding more destinations from LGB. “We’ve been talking to them all the time about different destinations,” he said, adding that Denver and Dallas/Fort Worth are possibilities. While these are currently only discussions, Rodriguez said, “next year may bring some interesting things.”
The airport’s new terminal, completed in December 2012, has been well received by the industry. In its first year, the terminal garnered three awards for its design and service: Aviation Project of the Year 2013 from the California Transportation Foundation; Project of the Year from the American Public Works Association; and Best Concessions for a Small Airport from Airport Council International.
Improvements to the airport are continuing, with a new auto rental center, baggage claim area and parking garage upgrades slated for completion in the next three to four years. “It is going to be done in such small increments because we’re not going to ruin customer service to improve customer service,” Rodriguez said of the timeline. The rental center must be built before the old facility is torn down. “It’s like fixing a jet engine while you’re up in the air,” he said.
Rodriguez explained that in the coming year “We’re going to continue our push to put the airport on the map, both for our commercial service and for our general aviation.” He added, “Transportation hubs have forgotten that they serve passengers. They view their customer base as part of their capacity . . . We are viewing the customer in a different way – we are viewing them as individuals.”
Getting Around On The Waterfront
From whale watching tours and Catalina trips to cruises to Mexico, ocean lovers have plenty of options for water travel in Long Beach.
This past year, locals had more options than ever for cruises, thanks to Carnival Cruise Lines adding the 2,124-passenger Carnival Miracle to its Long Beach operations. The ship expanded Carnival’s services with 15-day trips to Hawaii and additional cruises to the Mexican Riviera. “Carnival Miracle has been very well-received since launching a seasonal program from Long Beach last year,” Vance Gulliksen, Carnival spokesperson, told the Business Journal.
In 2014, Carnival is adding another ship to Long Beach, the Carnival Imagination. The 2,052-passenger ocean liner offers year-round three- and four-day cruises to Baja, Mexico, as does Carnival’s other Long Beach-based vessel, the Carnival Inspiration. “With the arrival of the Carnival Imagination . . . Carnival Cruise Lines expects to carry 500,000 passengers annually from Long Beach – the most of any cruise operator,” Gulliksen said.
For trips closer to home, Catalina Express offers daily round trip travel to Catalina Island from Long Beach, Dana Point and San Pedro. According to Elaine Vaughan, vice president of marketing and sales for Catalina Express, ridership in 2013 increased by about two or three percent. She attributes the increase to the company’s “ride free on your birthday” promotion, as well as special vacation packages celebrating the City of Avalon’s centennial anniversary.
“There were increased passengers pretty much every month of the year,” Vaughan said. The company is considering extending its birthday promotion past the April 2014 expiration and will announce its decision in January.
Harbor Breeze Cruises offers daily boat tours of the Long Beach harbor as well as whale watching cruises. Ridership in 2013 remained about the same as the previous year, owner Dan Salas said. “Our numbers for our harbor cruise, the less expensive trips, were good.” The company’s new vessel, a catamaran dubbed The Triumphant, “has been an instant success,” he said.
Our local waters have been teeming with wildlife this year, according to Salas. “We have had a fantastic year for animals,” he said, attributing the increase in activity to cleaner, cooler, more nutrient-rich water. Harbor Breeze whale watching tours have spotted great white sharks, orcas, sperm whales, blue whales, dolphins and sea turtles this year. In 2014, Salas is considering offering longer sightseeing tours, an all-day whale-watching trip to Catalina Island and coastal bird watching tours.
In the summer, the waterfront’s busy season, Long Beach Transit (LBT) offers water taxi services called AquaBus and AquaLink. The service is offered from May through September. According to Kevin Lee, spokesperson for LBT, total ridership increased by 15 percent from 2012 to 2013. The jump is partially due to beginning water taxi service for the gay pride festival, a week before the usual Memorial Day weekend kick-off.
This year’s Memorial Day weekend ridership increased by 70 percent for AquaBus and 65 percent for AquaLink, Lee said. LBT also experienced a slight uptick in bus ridership in 2013. ‘”We have a slight increase of about half a million [riders].”
At this point, LBT has no plans for new programming or scheduling in 2014. Lee said, “Maybe there are new things on the horizon, but as of right now, nothing new.”
Attractions Continue Developing New Programming And Events
Long Beach’s major seaside attractions, including the historic Queen Mary, the Aquarium of the Pacific and Shoreline Village, keep visitors coming back by hosting fresh programming and events.
This year, the Aquarium of the Pacific celebrated its 15th anniversary with a theme of ocean exploration, which continues through 2014. The National Oceanic Atmospheric Administration (NOAA), of which Aquarium President and CEO Jerry Schubel is an advisory boardmember, was designated by the U.S. Congress to bring together public and private agencies to promote ocean exploration.
Out of that came the idea for an annual forum, the first of which the Aquarium hosted in July. “We had over 110 of the nation’s leading ocean explorers [at the event],” Schubel said. Ocean exploration themed programming also includes guest speakers and a temporary exhibit of a whale fall, an underwater ecosystem created when a deceased whale falls to the ocean floor.
By year’s end, Schubel expects Aquarium attendance to exceed 1.5 million. “Our overall revenue is up over last year,” he added, estimating that revenues may reach about $40 million by year’s end. Last year, revenues were $38 million. Since construction on the Aquarium’s shop was completed this year, retail sales are up $82,000 over last year.
New exhibits and programming, geared to let guests more intimately interact with animals, are in store for 2014, Schubel said. “Every morning there is going to be a penguin walk that will be in the Great Hall in front of our guests. We will have a new touch pool for bonnethead sharks and cownose rays, and there will be expanded opportunities to go behind the scenes and feed animals,” he said of summer plans. Other plans include a new steelhead trout exhibit and an exhibit of a mating pair of birds that are in extinct in the wild.
“I think the Aquarium continues to be a success. We have a wonderful partnership with the City of Long Beach, and I think without that we certainly wouldn’t be the world class Aquarium that we are,” Schubel reflected.
Just across the harbor is the Queen Mary, a permanent hotel and attraction at Long Beach’s waterfront. The vessel offers regular historical tours as well as ghost tours, and houses an exhibit of Princess Diana’s personal gowns, heirlooms and photographs.
The ship is host to a variety of events throughout the year. “We’re continuing to grow the events programs significantly each year and are seeing great success with that, drawing new and repeat visitors,” Steve Sheldon, director of entertainment events, told the Business Journal. “Events here at the Queen Mary bring in about 400,000 people per year.”
Some of the ship’s “blockbuster” events include CHILL, which features giant colored ice sculptures, ice skating, ice tubing and a holiday village; and Dark Harbor, a fall event with a series of spooky mazes. According to Sean Maddock, regional director of operations for Evolution Hospitality, the Queen Mary’s property management firm, these events were a hit in 2013. “This was our 13th year of Dark Harbor and we have never been more successful. CHILL, in its second year, is already showing significant attendance growth over last year’s ticket sales,” Maddock said.
Coming up, a New Year’s Eve event promises to bring in 4,000 to 5,000 visitors. “We are celebrating New Year’s this year by introducing a variety of entertainment based on some of the most exotic destinations that the Queen Mary traveled when she was sailing,” such as Brazil, France, India and more, Sheldon said. Smaller events, such as music festivals, will take place throughout the year.
Look across the water from the Queen Mary and you’ll spot Shoreline Village, another of Long Beach’s tourist destinations, featuring shops, restaurants and events. The village has a new property manager, Debra Fixen, who started in November. Although she has only been there a short time, she has a feel for how Shoreline Village’s tenants fared in 2013. “It seems like things are picking up for people,” she said.
The center has a new tenant, Louisiana Charlie’s BBQ & Cajun, a restaurant offering Louisiana fare. There have been no recent vacancies at the village, Fixen said, and there may be “potential new shops” in 2014, although nothing is set in stone.
For the holidays, Shoreline Village hosts entertainment such as Santa’s Village and carolers every weekend until Christmas. Further down the line, the Mardi Gras festival is slated for March 1. “We have a Mardi Gras festival every year, and that’s going to be expanded,” Fixen said. Although plans are preliminary, the event may now include a masquerade party.
Long Beach Convention Center Stays Competitive With Major Upgrades
Repeat visitors to the Long Beach Convention & Entertainment Center might feel as though they’re visiting a brand new venue now that several major upgrades have been completed. With the addition of a contemporary restaurant, an adaptable lounge space, updated carpeting and the new Pacific Ballroom at the Long Beach Arena, the center has gained a leg up in an oversaturated convention market.
The convention market has about 35 percent more supply than current demand requires, according to Steve Goodling, president and CEO of the Long Beach Area Convention & Visitors Bureau (CVB). “The whole redesign of the building was to make this a premiere space for collaboration and connecting,” Goodling told the Business Journal.
Projects like the Pacific Ballroom, which is equipped with a suspended system of curtains and lighting that adjusts the venue’s size from a sports arena to a ballroom, help keep the Long Beach Convention & Entertainment Center competitive. “Planners have been ecstatic because, until now, they have always had to plan for additional lighting, sound and rigging costs,” Goodling explained. “They could never have the party that they would like to have because it was cost prohibitive.” The new ballroom eliminates those costs, perhaps with the exception of hiring a lighting designer.
Although the new arena has only been open for a month, it has already received positive publicity, Goodling said. In November, Bellator Mixed Martial Arts (MMA) held a fight at the arena that was broadcast live on cable television, showing off the arena’s improvements to a large audience.
The convention center is managed by SMG, with Charlie Beirne as its general manager. Beirne said that having the arena’s capabilities demonstrated on television “opens up so many doors, because all the promoters see it.”
Before the new arena opened in November, the CVB marketed it through promotional videos highlighting its new architectural features. Eight bookings were secured before the arena opened, according to Iris Himert, executive vice president of the CVB. Fifteen events have been booked for the arena from 2014 to 2018, with a total estimated economic impact (EEI) of $37 million to the city. “That is $37 million worth of business that would not have been here if it weren’t for that space,” Goodling noted.
“Last year, the arena was used 155 days . . . but this year we expect to see a significant increase,” Goodling said. Beirne commented that his office is “getting calls all the time” about the arena. “The reaction has been phenomenal,” he said.
Sixteen key groups are coming to the convention center in 2014, with a total EEI of $101.56 million, according to the CVB. These groups will generate more than $1.2 million in transient occupancy tax (hotel bed tax) from visitors staying at local hotels, the CVB estimates.
The city helps the CVB secure some of these groups. “A lot of different city departments and city agencies have helped bring business to the city,” Goodling said. The Port of Long Beach helped secure Intermodal Association of North America’s convention for next year, with about 2,500 attendees and $1.9 million EEI. Mario Rodriguez, director of the Long Beach Airport, also helped secure some business, with the Airports Council International – North America planning their convention here in 2015.
A constant challenge for the CVB, however, is selling its network of hotels to event and convention planners, since the city does not have a single location that can accommodate 1,000 rooms, according to Goodling. “It requires everyone to work together to make a client’s room block request satisfied,” he said. “So if everyone doesn’t work together in giving the amount of rooms a client needs, then as a city, we all lose.”
That’s why the CVB and downtown hotels work together to ensure a convention’s room block needs are satisfied. “For every large client that comes in, we have a hospitality reception for them,” Goodling said.
Once clients are secured, Beirne said, “What keeps them coming back is people, service and the freshness of the product.” Himert added that having dedicated staff also helps bring people back. She stated, “There is a passion when they represent Long Beach, not only in the sales process, but also in the service process.”