Room for More Rooms?
Absolutely, say hotel investors, who are looking to end Pasadena’s shortage of accommodations for visitors
STORY BY // Karen E. Klein
Everyone knows that it’s tough to get a hotel room in Pasadena between Christmas and New Year’s Day. What’s surprising is that the city has a serious hotel shortage year-round, with nightly occupancy rates in Pasadena around 83 percent—20 percent higher than the national average.
In fact, Pasadena’s hotel occupancy rate is high even for Los Angeles County, which boasts the country’s third-largest hotel market (after Orlando and Las Vegas), with 90,000 hotel rooms averaging 77 percent occupancy, according to Bruce Baltin, a hospitality-industry analyst and senior vice president at PKF Consulting USA.
The fact that Pasadena’s hotel occupancy rate beats the county as a whole—and not just at parade and football time—is hard for many to grasp, says Richard McDonald, a longtime resident and land-use attorney who is currently shepherding several new hotel construction deals through city approvals. “People ask me all the time, ‘Gosh, do you think Pasadena can support all this?’ and I say, ‘Totally. Plus more,’” McDonald says.
It’s been almost two decades since a new hotel has been built in Pasadena, severely crimping business and personal travel to the city and limiting the draws to the Pasadena Convention Center, which has yet to take full advantage of its $150-million expansion, completed at the height of recession in 2009.
But all that may turn around in the near future, when as many as six new hotels are set to sprout up in the city, ranging from boutique inns to extended-stay business hotels to historic properties aimed at tourists and Asian business travelers. Several existing hotels, including the Sheraton and the Hilton, are set to undergo renovations and facelifts. If all the city’s currently slated hotel projects go from concept to reality, that could double the number of hotel rooms in the next two or three years.
The interest in hotel construction has been sparked by a combination of historically low interest rates, a rebounding California economy and a 2010 study that showed Pasadena could fill an additional 300 full-service hotel rooms every night, says David Klug, a redevelopment manager for the city.
Currently, the city is home to the iconic Langham Huntington Hotel, the Westin, the Hilton, the Sheraton and the Courtyard by Marriott. Add a handful of smaller properties around town and strung along East Colorado Boulevard, and you get nearly 2,500 hotel rooms.
Sound like enough?
Now consider that the Rose Bowl has a capacity close to 100,000 and hosts large events year-round, not just on New Year’s Day. Last September, 20,000 Cornhuskers poured into the city to watch their University of Nebraska football team lose 36-30 to UCLA, for instance.
Also consider the convention center, Caltech , Art Center College of Design, the Norton Simon Museum, the Pasadena Playhouse and the city’s revitalized arts and commercial districts, which are becoming international draws for shoppers and tourists.
Of all the regional hotel markets in the county, Pasadena ranks near the top from an occupancy standpoint, Baltin says. “It’s a very strong hotel market and improving. Right now, it’s more corporate than tourist so it doesn’t command the room rates that we see over on the Westside, but we’re beginning to see more weekend traffic, with hotels doing packages that bring people in for the restaurants, museums and shopping. That never used to be the case.”
The city’s strength as home to engineering and high-tech firms like Parsons and IdeaLab, along with its central location for out-of-towners who want to visit Disneyland one day and Universal Studios the next and its proximity to Downtown Los Angeles makes it a hot destination year-round, says Eric Duyshart, the city’s economic development manager. “Our occupancy numbers speak for themselves. In fact, the very successful hotels in Arcadia and Monrovia are there because people can’t find rooms in Pasadena itself,” he says.
As for often-cited worries that a glut of new hotel construction will lower occupancy rates at the city’s existing properties, Duyshart dismisses them as shortsighted. “Businesses and restaurants in the city will be helped by full occupancy at their favorite hotels, because that puts more people on the streets after 5 p.m. The construction will bring additional jobs and demand for things like carpeting and TV sets. It’s a good thing,” he says.
The first project expected out of the hotel-building pipeline will be a Residence Inn by Marriott, a 145-room, extended-stay hotel to be built on the northwest corner of Fair Oaks and Walnut. This freeway-close, limited-service hotel is expected to cater to business travelers, convention-goers and tourists who want minimal amenities.
Next in line is the Constance Hotel, a 155-room boutique hotel being renovated on the southwest corner of Colorado and Mentor, just east of Lake Avenue. The historic, seven-story hotel was the epitome of swank when it opened in 1926, but it deteriorated in recent years, eventually being used to house low-income seniors. Renovations are being carried out by a Thai hotel developer, Singpoli Pacifica, with Park Place Commercial, a U.S. limited partnership.
The hotel, which will be part of a mixed-use project including an office building and ground-floor retail, will be operated by Dusit International, one of Asia’s leading hotel groups. This is Dusit’s first foray into the U.S. “One of the reasons Dusit was so interested is because it has an international booking system and can support travelers from China, Hong Kong, Taiwan and Vietnam,” says McDonald, who is the attorney representing the firm, adding, “This is a real opportunity for this city to attract Pacific Rim customers who come to the West San Gabriel Valley on business or for training.”
Nearer to Pasadena City Hall and Old Pasadena is the Julia Morgan YWCA building, at Marengo and Union, currently slated to become a 150-room hotel. The city purchased the historic building designed by Morgan, the first woman licensed as an architect in California and a favorite architect of William Randolph Hearst’s, in April 2012 after it sat vacant for more than a decade. San Francisco-based Kimpton Hotels & Restaurants is negotiating to turn the property, which is on the National Register of Historic Places, into a boutique destination. The company pioneered the concept of boutique hotels in historically relevant buildings and currently operates 61 hotels in 24 cities.
Another extended-stay hotel, a 175-room Hyatt Place, is on the drawing board for the Paseo Colorado site that formerly housed a Macy’s department store. Environmental and traffic studies are being done currently. If this project moves forward, it would provide much-needed additional space for the adjacent Pasadena Convention Center, which tripled in size in 2009 and could attract larger events if there were more nearby hotels, says Michael Ross, chief executive of the Pasadena Center Operating Company, which manages the Pasadena Convention Center, the 3,000-seat Civic Auditorium and the Pasadena Convention and Visitors Bureau. “With more hotel rooms we would have a better opportunity to book more and bigger convention groups, absolutely,” he says.
Finally, preliminary plans are underway for a full-service, 350-room hotel at the northwest corner of Colorado and Hill, which formerly housed the Loud Ford dealership near Pasadena City College and Caltech. J&K Plus Investments, a consortium made up of local and foreign investors making its first foray into Pasadena, purchased the site along with another across the street, at Colorado and Holliston. There may even be a second 125-room boutique hotel on the southern side of the street, probably with a different hotel operator, according to McDonald, who is representing the firm on the proposed projects. Both Pasadena City College and Caltech have growing populations of foreign students whose parents need lodging when they visit, and both schools could use banquet facilities and conference rooms at the hotels as well.
McDonald sees the current boom as another piece of the maturing of Pasadena, with the city becoming ever more linked to greater Los Angeles County through the Gold Line. “If you look back twenty years ago, you can see there weren’t a lot of destinations and activities that would inspire somebody to travel here for something other than the Rose Parade and the Rose Bowl,” he says. “Now, it’s a very different scene. I like to think of what’s going on right now as building our own little Chicago Loop from Los Angeles up the west side of Pasadena and eventually heading out east to Claremont. When that all goes through, the spin-offs and synergies between the Claremont Colleges, Caltech and USC will be awesome. We have to make sure we’re ready for that.”
Originally published in the November/December 2013 issue.