Los Angeles Hotels Approach Summer Travel Season Semi-Recovered But With Room To Grow
Los Angeles hotels are still lagging behind pre-pandemic occupancy but have surpassed 2019 numbers by a couple of key measures. With the peak summer season ahead, experts say there’s room to grow on all fronts.
Occupancy at the end of 2019 in Los Angeles County was 78.4%. By the end of 2023, it had recovered to 71.7%, according to JLL Hotels and Hospitality Investment Sales Managing Director James Stockdale.
Revenue metrics have made faster progress, climbing back to their pre-pandemic levels, but seem to have stalled.
In the first quarter of 2019, revenue per available room, or revPAR, for LA County was $129.51. In the first three months of this year, it was $130.27. But it is lower than in the first three months of 2023, when revPAR for the county was $136.02, according to Stockdale.
Downtown LA, though, didn’t see its Q1 2024 numbers surpass what it enjoyed in 2019.
Downtown gets a lot of business from a few types of travelers that haven’t fully come back, Stockdale said. Business travelers have still not returned in full force, nor have international travelers. Convention demand is also still recovering, Stockdale said.
Standout markets included Long Beach, which was up almost 15% at the end of 2023 compared to the same time in 2019 in terms of revPAR, and the South Bay, which includes beach cities like Manhattan Beach as well as Palos Verdes and coastal San Pedro. The South Bay was up 10% at the end of 2023 compared to the end of 2019, Stockdale said.
“These are very easy, close, approachable markets with a lot of fun things to do around them,” Stockdale said. “That leisure element is definitely helping them out.”
Long Beach hotels get a boost from being close to the cruise terminals, Stockdale said. Also playing into their success is that neither market relies heavily on individual corporate travel, which has been slower to return than leisure travel.
Looking forward, hotel market watchers anticipate the hospitality sector will see a boost between now and the end of the year.
In March, CBRE anticipated revPAR would be lower in the first three months of this year “due to last year’s strong performance,” but is expecting a wave of international travelers to come back this summer, driving higher occupancy and boosting other metrics, CBRE’s Head of Hotel Research & Data Analytics Rachael Rothman said in a release.
That growth won’t be spread evenly among all types of hotels, CBRE Hotels Valuation & Advisory Executive Vice President Brandon Feighner said.
“Based on our research, the lion’s share of future growth in the short term is anticipated to be in the upper end of the spectrum, which as of recently has not benefited from the projected actualized increases in both group and international travel,” Feighner wrote in an email.
