LOS ANGELES, CA-Los Angeles County continues to lead the state in the number of new hotel rooms planned with 12,106, a 2.3% increase over this time in 2001, according to a new study.

The report by Costa Mesa, Calif.-based Atlas Hospitality Group, a hotel industry consulting firm, says five new hotels opened their doors in Los Angeles County so far this year and nine new hotels with 1,053 rooms are under construction.

That puts L.A. County second only to San Diego County in the state in terms of new hotels under construction, Reay says, but President Alan X. Reay of Atlas tells GlobeSt.com, “This still is a very small amount of new supply for a market as big as Los Angeles.”

Reay tells GlobeSt.com that hotel development is proceeding slowly in Los Angeles County because development is very costly here, financing is difficult to obtain and falling revenues discourage new projects.

Los Angeles County continues to feel the reverberations of the slumping economy and the Sept. 11 terrorist attacks, Reay says, pointing out that overall revenue is down about 10.5% for the year in the county.

“We were figuring that if the numbers got back to normal by April or May of this year, we could make an argument that the Sept. 11 attacks were no longer a factor,” Reay tells GlobeSt.com.

But the numbers didn’t return to normal, and Reay says markets that depend heavily on tourists to fill the hotels are still feeling the Sept. 11 effects, while markets where hotels depend heavily on business travel are still lagging because of the protracted economic slump.

“Companies are traveling less, so the high-end hotels are impacted more,” Reay says. “The limited service hotels are actually doing about the same, or in some cases are up a bit.”

Airport area hotels, on the other hand, have suffered more than others. Properties around Los Angeles International Airport report overall revenues down about 20%, Reay says.

Reay’s company also tracks the prices being paid for hotels. Early information in a report now being prepared suggest that purchase prices are up a bit or stable this year in L.A. County, Reay tells GlobeSt.com, adding that “There seems to still be a big disparity between the bid and ask prices.”

Reay says that overall, the number of new hotels opened this year in Southern California increased by 25% compared with last year, while the number of new rooms increased by 14.3%.

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