LOS ANGELES While hotel business for Southern California has been healthy, thanks to extremely limited supply growth, one expert warned of huge growth here in the resort segment.
Bruce Baltin, senior vp of PKF Consulting, speaking at an executive briefing sponsored by the law firm of Jeffer, Mangels, Butler & Marmaro held just prior to the UCLA investment conference, cautioned that a number of luxury properties are coming on line or already open here.
The PKF executive pointed to the Bacara resort located just above Santa Barbara which opened late last year and the St. Regis resort going up in Monarch Beach. Marriott likewise has a resort under development in Laguna Beach, said Baltin.
[These] are being built for the incentive market which is the first to take a hit when there is a slowdown, said Baltin, who said he believed these properties will be absorbed by the market but could end up having to lower their prices.
We have been riding through a great time in Southern California, he said. There has been less than 1% growth in supply here and that has been fully absorbed, he noted.
As for full-service properties going up in Los Angeles County, Baltin noted that the 620-room Renaissance Hollywood, going up as part of the Hollywood/Highland redevelopment project is the only significant development.
The two biggest factors facing L.A. County hotels this year are California s energy crisis and the potential strike of the Screen Actors Guild, which could occur in May. Otherwise, all other signs look good, said Baltin. (1/17/01)