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Health of Local Hospitality Industry Depends on Driving Rates Higher

ORANGE COUNTY, CA-Without new hotel properties being built, pressure will undoubtedly be on hotel operators to raise their room rates to satisfy investor demands for increased return on equity.

By Joel Cone | Updated on November 29, 2000

ORANGE COUNTY, CA-Expansion of the Anaheim Convention Center is complete, and Disney is set to open its new California Adventure theme park in February. These new facilities are sure to fuel the county’s hospitality industry’s profits next year, that is if room rates can be driven up.

Orange County currently has 33 hotel properties in the planning stages, which will add a total of 9,265 rooms. Still, without a lot of new product already in the market, pressure will be on raising room rates.

Industry analyst Robert A. Rauch, managing director for InterBank/Brener Hospitality in San Diego, says that Anaheim’s biggest problem historically has been low room rates for old properties that are in inferior condition.

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