Marketing Arm Grows with Hotel Trade in Irvine

Orange County Business Journal
09/21/15

Marketing Arm Grows with Hotel Trade in Irvine
HOSPITALITY: Boost in store for improvement-district coffers
By Paul Hughes

http://www.ocbj.com/news/2015/sep/21/marketing-arm-grows-hotel-trade-irvine/

Irvine’s growing role as a hospitality hub will bring its own reward to hotels in the city.

The benefit is expected to come in the form of an additional $750,000 for cooperative marketing efforts on behalf of the growing roster of hotels throughout the city over the next two to three years.

The nearly 36% increase from the $2.1 million expected to flow to a city-sanctioned hotel improvement district in the current fiscal year would come from six new establishments—one that opened in August and five more in various stages of planning.

The growth streak is set to raise the number of hotels in Irvine to 21 over the next 18 months. That places Irvine in the middle of the pack of OC cities for hotel counts and takes the total room count in the city up to about 4,700—both gains of more than 30% (see sidebar, below).

A bed tax of 8% is expected to bring the city itself $11.2 million this fiscal year, a city spokesperson said.

The hotel improvement district in Irvine (see sidebar) assesses an additional 2% fee.

One-fourth of the 2% levy goes to the city, and the rest goes to tourism marketer Destination Irvine, which operates as a unit of the Irvine Chamber of Commerce. The chamber also administers the improvement district, overseen by a board that includes hotel representatives.

The $2.1 million for the 12 months through next June is a projected increase of 17%, even before most of the new hotels open, thanks largely to the recent strength of occupancy and room rates in the city.

Irvine-based hotel consultant Atlas Hospitality Group said the $750,000 annual gain from the six new hotels would likely begin to hit the hotel improvement district’s coffers in mid-2017, as most of the new properties enter their second year of operation.

‘More With Less’
Much of the marketing happens through Destination Irvine—Irvine’s tourism promoter, akin to Visit Anaheim or Newport Beach & Co.

Linking the chamber and the tourism promoter is uncommon, said chamber Chief Executive Tallia Hart. That began in 2002 when Destination Irvine was founded.

“Working together scaled the group correctly,” said Hart, who came to the Irvine chamber six years ago after serving in a similar role in San Rafael.

The setup that has Destination Irvine as an arm of the chamber means “we can do more with less,” said Linda DiMario, who oversees the destination marketing unit as the chamber’s vice president of economic development and tourism.

Irvine isn’t known as a hotbed of hotel offerings—a fact Hart and DiMario embrace.

“[We] know who we are,” DiMario said.

The city of Anaheim has more than nine times as many hotels as Irvine—150 compared with 16—and 19,995 hotel rooms, with a hotel tax of 15% that brought it some $120 million; next year it’s budgeted $133 million, a spokesperson said.

SMERF
Destination Irvine looks to make a virtue of its relatively smaller lineup with a focus on niche markets.

Irvine hotels attract two main groups: weekday business travel, and sports and leisure groups on weekends.

The first makes sense immediately for a business-centric city like Irvine, while the second is covered by the acronym “SMERF”—social, military, educational, religious and fraternal groups that Irvine encourages to “stay, play and dine” in the city, DiMario said.

Sometimes the two targets overlap—as in a new Destination Irvine marketing video that shows a business executive here for a midweek meeting and later joined by her husband and children for the weekend.

Rock the Roses
The pitch for the city’s hotels is set for a boost from the Destination Irvine float in the 2016 Rose Parade on Jan. 1 in Pasadena.

The parade’s theme is “Find Your Adventure,” and Destination Irvine’s float is called “Innovation Rocks!”

DiMario said about 82 million people would see the parade in person or on television.

She said applying for a spot in the parade cost $5,000, and building the float will cost about $200,000.

Some $130,000 more is committed to marketing the float and its appearance—including banner ads on travel sites, paying a Pasadena blogger to write about it, and the value of a “VIP Rose Parade Experience” prize package that 11 of the city’s 16 hotels are offering in conjunction with the event.

All 16 hotels are represented on the float, but five smaller hotels opted out of the prize package, she said.

The Irvine Marriott is participating, marketing the contest at the hotel and through social media.

“The Rose Parade is a ‘bucket list’ item for some and [an] exciting tradition for [others],” Scott McCoy, Marriott general manager and chairman of Destination Irvine’s board of directors, said in an email.

Pasadena-based Phoenix Decorating Co. is building the float.

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