CHRISTOPHER WOODARD Staff Reporter San Fernando Valley hotels saw strong consumer demand in the first five months of 1998, with occupancy rates hovering at about 74 percent and room rates jumping 9.4 percent over the same period last year. Industry analysts attribute the demand in large part to a big boost in tourism, with Los Angeles seeing the highest number of travelers to the city since the early ’90s. “An occupancy rate of 74 percent essentially means you’re at capacity all the time,” said Bruce Baltin, senior vice president of PKF Consulting, which tracks the hotel industry. The strong demand, and a slowdown in hotel development during the recession of the early 1990s, are contributing to a resurgence in hotel construction throughout greater Los Angeles, Baltin said. “There was relatively little building in the 1990s, while the economy has rebounded pretty strongly,” he said. In a ranking of hotels compiled by the San Fernando Valley Business Journal, the Holiday Inn Burbank enjoys a slight edge over competitors in terms of the number of rooms available. The Holiday Inn has 489 rooms, followed closely by the Burbank Airport Hilton & Convention Center, with 486 rooms; the Universal City Hilton & Towers, with 484; the Warner Center Marriott, with 463; and the Sheraton Universal Hotel, with 442. But new competition is coming on line. Newhall Land & Farming Co. is developing Santa Clarita’s first full-service hotel, a $38 million, 250-room project that will feature a 26,000-square-foot conference center consisting of large and junior ballrooms, several smaller meeting rooms and a wedding garden and outside reception area. The project, which is being built in Newhall Land’s Town Center Drive project, will be run by Hyatt Hotels & Resorts. The exterior of the building has been completed and the interior is being finished, with the hotel scheduled to open Aug. 1. “As the business community continues to grow substantially in the Santa Clarita Valley, there is a great demand for higher-end hotels,” said Marlee Lauffer, spokeswoman for Newhall Land. The hotel will depend heavily on the nearby Six Flags Magic Mountain and Hurricane Harbor amusement parks as well as a growing number of businesses that are relocating to Valencia, including Century City-based Princess Cruises and Burbank-based Explorer Insurance, she said. Universal Studios Inc. also plans to develop two hotels, each with as many as 600 rooms and 40,000 square feet of meeting space, as part of the expansion of its theme park and sound stages. The studios’ master plan is still wending its way through the Los Angeles county and city planning processes, and no timeline has been set for the hotels’ construction. Elsewhere in Los Angeles County, Majestic Realty Co. is expected to move forward plans to build the long-awaited downtown Convention Center hotel by the end of the year, and Columbia Sussex Corp., a Kentucky-based hotel developer and operator, is building a 188-room hotel on the beach in Santa Monica. The $30 million Le Merigot Beach Hotel is scheduled to open in December, and will be the last beachfront hotel in Santa Monica due to a moratorium on such projects approved by city residents in 1990. For the first five months of the year, L.A. had a countywide average hotel occupancy rate of 75.2 percent, up from 74.1 percent from the same period in 1997, according to PKF Consulting. Occupancy rates in the San Fernando Valley, while solid, were flat this year in comparison to last, with the rate hovering around 74.2 percent both this year and last. Room rates countywide saw a 10 percent increase, jumping from $100 last year to $110.14 this year. San Fernando Valley room rates increased 9.4 percent during the same period, increasing from $94.54 in the first five months of 1997 to $103.47 so far this year, according to PKF. The number of overnight visitors to Los Angeles in 1997, meanwhile, reached 23.6 million, the highest number since 1990, according to the Los Angeles Convention and Visitors Bureau. This year the bureau expects 23.9 million visitors to L.A. While demand has been strong in the first quarter, executives at some hotels say the market appears to be slowing in the second quarter, although numbers are not yet available to track a decline. David Cornish, general manager of Burbank Airport Hilton, attributes the downturn to a slight drop-off in tourism and corporate travel. “This summer we don’t have any major new attractions at Universal (Studios) or Six Flags. We don’t have the hype of a Superman (the ride) or Jurassic Park that we had last year,” he said. Corporate travel may be lagging, Cornish theorizes, due to belt-tightening that comes with the mergers going on in the corporate world. Reginald McDowell, general manager of the Sheraton Universal Hotel in Universal City, said he is seeing a drop-off in leisure and business travel, which he attributes to lingering financial problems in the Far East. “It looks better than last year, but we’re not sure we’ll be able to meet our expectations,” he said.