Los Angeles hotel market remains hot!is known for several things: movie stars, Beverly Hills and the Golden Gate Bridge. Back in the mid- to late-1800s, the rush to California was for gold. These days, people are rushing to California, not because of its gold specifically, but because of its golden economy.
With an economy on the rise, California is enjoying a healthy real estate market. Specifically speaking, California's demand for hotels is booming, and experts at New York-based Jones Lang LaSalle Hotels say this upward trend will continue through 2001.
I had the opportunity to talk at length about the L.A. market with several members of the Jones Lang LaSalle Hotel team. According to Arthur Buser, Jones Lang LaSalle Hotels senior vice president and head of the West Coast Hotels' division, several factors have contributed to the flourishing hotel demand Los Angeles is experiencing.
"The diversification of industries, strong growth in the entertainment industry and the return of tourists are certainly contributing to the success in the Los Angeles market," says Buser. "People come to Los Angeles for a number of reasons, and the hotels have benefited from that."
According to a review conducted by LaSalle Hotels, Los Angeles currently supports a total inventory of 92,000 hotel rooms. Since 1991, an additional 3,886 rooms have been added. Buser says that hotel development is steadily under way, primarily in Santa Monica, Beverly Hills and, not surprisingly, Hollywood. Buser, along with LaSalle Hotels North American managing director Doug Hercher, agree that Hollywood - despite the film industry's international expansion - will remain the entertainment hub of the world.
"Even though people will film [movies] elsewhere, the guy who makes the decisions to film elsewhere will always be in Hollywood," says Hercher. "I don't think anything's going to change that."
Los Angeles is also seeing a huge expansion in international trade, high-tech firms and the fashion industry. And while Los Angeles is still attractive to Asian investors, Buser is seeing a new trend of hotel investors.
"Another group of new buyers are people from the media entertainment industry and high-tech industries," says Buser. "We're seeing more and more of these types of investors."
Although Los Angeles continues to be an attractive hotel market, it does have competition. Hercher and Buser agree that Boston, New York,and Washington, D.C., will continue to attract hoteliers. They also predict some new cities will see a rise in hotel development including: Miami, Portland, Ore., and Seattle.
And what about San Francisco? Should hoteliers continue to leave their hearts there? "San Francisco is where everyone wants to be," says Hercher. "Los Angeles is where - if you're a hotel operator - you need to be.">CNFina ncing Today