Inland Hotel Sales Sizzle

COSTA MESA, CA-The number of hotel sales and total dollar volume of sales fell in Orange County during the first half of this year, according to a new survey by Costa Mesa-based Atlas Hospitality Group, but the two Inland Empire counties of Riverside and San Bernardino both posted more sales transactions and a higher dollar volume.

In Orange County, the number of sales fell by 18.7% to a total of 13 sales when compared with the first half of last year, while the dollar volume of transactions declined by 12.7% to approximately $69.4 million, according to the Atlas report. However, the median price per room was up by 2.8% to $57,480 in Orange County, indicating the county’s hotels are holding their value.

One of the most dramatic findings of the survey is the increase in prices paid in the Inland Empire, where the median price per room rose 43% in Riverside County to $59,500 and climbed 33% in San Bernardino County to $40,000 in comparison with prices for the first half of 2002.

The number of sales also rose in Riverside County, climbing by 33% to a total of 12, and the dollar volume jumped by 69% to $42.8 million. In San Bernardino County, the number of sales increased by over more than 114%, reaching 15, while dollar volume was up 334% to $57.1 million.

The two major factors propelling the increases in the Inland Empire were that hotel sale prices there had lagged all of Southern California for the last five years and were therefore artificially lower, according to the Atlas report. Secondly, it said, the positive expansion of companies and business into the Inland Empire has helped spur strong increases in room revenues and occupancies.

The Orange County and Inland Empire results were part of a statewide survey showing that the number of sales in the state edged up 6% overall, but the number of sales was down in Northern California while rising in Southern California. The statewide dollar volume of transactions increased by 33%, but the number of larger transactions those of more than $5 million–fell by 22%.