New hotels approved for construction in West Hollywood will increase the 2,058 hotel rooms in the city by nearly 50 percent in the next few years. And several other projects in other areas of WeHo that are not yet approved but under discussion would boost that increase to 62 percent.
The increase in hotel rooms has raised questions among hotel owners and managers about the impact on their occupancy rates and thus their profits. A study published last year by STR Global Inc., a hotel research group, reports WeHo hotel occupancy rates were up 6.4 percent in 2013 to 82 percent. That compares with 77 percent occupancy during that period in greater Los Angeles as a whole. An analysis by the city’s Finance and Technology Services Department last year said most West Hollywood hotels reported occupancy rates of nearly 95 percent in July and August 2014.
On Monday the City Council will be asked to allocate up to $35,000 to study West Hollywood’s hotel market and determine the number of rooms the market actually can sustain. The study also will examine the impact of new hotel rooms and changes in occupancy rates on the city’s hotel room occupancy tax, which is the largest source of revenue for the city’s general fund. Those taxes were responsible for 26 percent of the general fund revenue budgeted for the 2014-2015 fiscal year.
The proposed study would look at the impact of new hotels under construction or planned in the city for the fiscal years 2016-17 through 2020-21. It will examine the impact by hotel type, price point, target market and geographic area (Sunset Strip, Design District/western Santa Monica Boulevard, Mid-City and Eastside). The study also will provide occupancy rates and hotel occupancy tax revenue projections for the new hotels.
Because of the hotel boom on Sunset Boulevard, the reputation of the Sunset Strip as a center of nightlife (and particularly rock music) has begun to change. A study published last year by Businessweek said the sound that best identifies it the Sunset Strip this year is not rock music but the sound of “buildings being demolished and new ones developed.”
The new hotels under construction are:
Kimpton, 627 N. La Peer, 105 rooms. Anticipated opening late 2016
James Hotel, Southeast corner of Sunset and La Cienega boulevards, 286 rooms. Anticipated opening late 2016.
Edition Hotel, Southeast corner of Sunset Boulevard and Doheny, 148 rooms. Anticipated opening early 2018.
Hotels projects that have been approved by the city but where construction has not begun are:
San Vicente Inn, 837-849 and 850 San Vicente Blvd., 32 rooms (three added to current 29). The project currently is under litigation.
Sunset Time, 8430 Sunset Blvd. at Olive, 149 rooms.
Hotel projects under review by city staff include:
8950 Sunset, 8950 Sunset Blvd., 165 rooms.
Robertson Lane, Robertson south of Santa Monica Boulevard, 250 rooms.
7811 Santa Monica, 7811 Santa Monica Blvd., 81 rooms.
If we live anywhere near impact zone of 7811 we can forever say goodbye to peace and quiet, a decent quality of life and the things that make up the character of our neighborhood. We can say hello to increased gridlock, hundreds of transient tourists who care nothing about our neighborhood, truck traffic, microclimates, parking problems, and stretched services including fire, law enforcement, traffic enforcement and first responders to emergencies. This project has no precedent of its kind anywhere in this City, straddling two residential neighborhoods, so why should we allow it to set any kind of realistic example if… Read more »
FYI, West Hollywood’s transient occupancy tax is 12-1/2%, except for whatever constitutes the West Hollywood Tourist Improvement District (I’m assuming this is the Sunset Strip) where a total of 15-1/2% may be charged. For reference, LA City transient occupancy tax is 14%, Beverly Hills is 14%, Santa Monica is 14% and unincorporated LA County is 12%.
The hotels are not the problem for affordable housing. Air BnB/VRBO on the other hand has a serious impact on affordable housing. Think about it. Venice has 1-2 small inns and i’m sure are constantly booked. But Venice want’s to ban Air BnB why? no parking and it takes up much needed housing stock. Hotels don’t have anything to do with affordable housing. A room rate for $600 a night doesn’t impact the annual rent for apartment rentals…if it does i’d like to have it explained here. Wheras if an apt that was rented for 1500 a month comes up… Read more »
Thank you. You are 100% correct and beautifully succinct in your writing. Any reference I made to so many new hotel rooms versus low income housing, was meant to point out the years of never ending declarations from City Hall that they are committed to creating affordable housing units, when in fact they caused the shortage due to the imposed rent control when the city was created. I have a double degree in Business and Economics from UCLA. The entire field of Economics starts with and can be summed up in full by teaching the analysis of RENT CONTROL. It… Read more »
The MGM Grand in Las Vegas has 5000 rooms. All our hotel rooms can fit into half the MGM. Just saying..
and West Hollywood is not Las Vegas. Sorry Larry but that was pointless. Of course we have smaller hotels. We are not as big a tourist attraction and if somebody wanted to build a giant hotel like that here, all hell would break loose. A public uprising would occur like this City has never seen.
The hotel industry already knows that “the number of rooms the market actually can sustain” is much higher than the current number. Otherwise they wouldn’t be investing big money in more hotels. Same in the Hollywood area. I bet they don’t need a $35.000 study to tell them that. Looks like AirBnB is hardly having an impact on hotel occupancy.
The finer points of the study will hopefully be more useful for us to learn about.
Correction: Robo parking is currently at $18 million.
I think the time to study this was before they approved all these new hotels. Our City, in this case, is doing things ass backwards.
@Allison I am surprised to see a real and true comment on this blog. Thanks. All the trite boxed answers that don’t really address the issues (like “I , I don’t think an increase in hotel rooms affects affordability in the area” has me thinking there is only the PARTY LINE WEHO BACKERS who will never say anything about the real issues in weho) The Hotels seemed to get approval with no meetiings, reviews or delays, yet small condo projects get hammered in endless “planning meetings” which is all a dog and pony show so the big money can put… Read more »
You’re welcome. I always make real comments on here. I can answer one of your queries. They (the City) help the mixed use projects because that is where the low income housing comes from. They approve variances to make them bigger in exchange for low income units. That alone relieves the City from having to build any of their own. It is my belief that the Robogarage is a total waste of money, but I hear talk of them wanting to build more of them across the City in the future. We, the people, need to stand up and let… Read more »
And more UNMANAGEABLE traffic. It is ridiculous that it takes over half an hour to go from Pavilions to Target.
Yes, I don’t think an increase in hotel rooms affects affordability in the area. It offers more rooms to compete with AirBNB, and people need to remember that people don’t just stay in West Hollywood to visit West Hollywood. This city is central to many places in Los Angeles, and people from the entertainment industry, businesses, as well as tourists all have a desire to stay here. I see now problem with it. If anything, it strengthens the local economy.
Jonathan, money is required to build affordable housing, and more money from hotel rooms may mean more money that we can spend for affordable housing.
I don’t see how all these NEW hotel rooms fulfill the City’s self proclaimed commitment to creating more affordable and low income housing units, to protect the poor, disabled and elderly, which is the kind of population that makes weho the unique community of arts, culture and acceptance of all. Creating close to 1000 new high end expensive hotel rooms for visitors to weho, IS A SLAP IN THE FACE TO ALL WEHO RESIDENTS WHO BELIEVE THE CITY WILL WORK TO CREATE A SIGNIFICANT NUMBER OF AFFORDABLE/LOW INCOME HOUSING UNITS! I am not surprised. I’ve been watching the city work… Read more »