|Two new hotels opened in Hollywood last month - the Kimpton Everly with 216 rooms and the Hampton Inn Hollywood with 112 rooms. With the Dream Hotel that opened in July, more than 500 rooms have been added to the Hollywood market this year. This is a 15-percent increase in the number of hotel rooms in Hollywood, a total of 3,926 rooms in 51 properties.
By my count, there are another 15 hotels proposed for Hollywood. I'm sure some people are asking if we can support them all. One important thing to remember is that the hotels do not all come online at once. It is a long way from a hotel being proposed to under construction and no guarantee that all the proposed venues will be built. The marketplace will be the final determinant of what gets built. The interest in building new hotels in Hollywood is a nice problem to have!
I recall back in 2000 when our chair-of-the board, Oscar Arslanian, and I trekked to Beverly Hills to meet with a representative of Hilton Hotels to convince them that they should come to Hollywood. It had been 25 years since a significant hotel had opened in Hollywood. Hilton turned us down, saying that the timing wasn't right for a hotel in Hollywood. We were ahead of our time.
It was a frustrating period. Hollywood was the top tourist draw in Los Angeles County, and yet no new hotels were coming to our community. They were locating in neighboring cities, which meant transient occupancy taxes (TOT) collected by those hotels were also going to other communities. TOT taxes can be an important component of a city's budget, so this was potentially a huge loss for Los Angeles. In L.A. during its last fiscal year, the city received $230.8-million in TOT taxes and another $27.5-million from short-term rental taxes. With Los Angeles facing a budget gap of over $200-million, finding new sources of revenue is key to maintaining services. Each new hotel that opens in the city helps fill the budget shortfall.
Aside from providing tax revenue to a city, there are numerous other benefits that new hotels bring to the community-one of which is jobs. The Dream Hotel and its associated restaurants employ about 800 people. The Everly Hotel has a staff of 125 and the Hampton Inn employs another 40. These are all new jobs, on sites where there were few jobs before. To be able to add this many jobs to our employment base is exciting. Yes, many of these jobs are entry level positions, but in this community with all income levels, we need both entry level and executive positions.
New hotels also add to the ambiance of a neighborhood. Infill development helps to activate the street. The areas around the Dream Hotel and Everly were previously "dead" as far as pedestrians. Now, you see people walking to and from these venues, which creates more interest but also makes the neighborhood safer. It is impressive to now see people walking in Hollywood, not just on the major thoroughfares, but also on the side streets. Hollywood is a model for the entire City on how to activate a neighborhood.
Hotels are also are great public gathering spaces for locals - with lobbies, restaurants, meeting rooms, and in some cases, rooftop terraces that overlook the Hollywood Hills and the L.A. skyline. The general manager of the Everly Hotel told me they are positioning their hotel as one designed to serve the local neighborhood. Since this new hotel lies in close proximity to many of our hillside neighborhoods, it only makes sense.
New hotels enrich a community in many ways. Downtown Hollywood is becoming an even more attractive urban neighborhood. The Hollywood hotel boom is a very good thing for our community and for the City as a whole.
This has been a special report on Oscar's Hollywood by Leron Gubler
|Posted By Oscar Arslanian on October 06, 2017 04:25 pm | Permalink |