REGIONAL REPORT : Slow Boat to Recovery : Southland Tourism in Doldrums, But Industry Is Glad Just to Be Afloat

After tallying the number of passengers boarded this summer, Catalina Cruises found that it had failed to meet expectations . . . thank goodness.

“I thought we would be down 10% to 15%,” said Paul Sokolowski, passenger services manager for the fleet of gray, red and white ferries that ply between San Pedro and Catalina Island. Instead, “We remained even with last year. For us, that was a positive.”

After struggling through a second straight tough summer, the giant Southern California tourism industry consoled itself with the fact that the summer of 1992--salvaged in part by discounts and deals--was no worse than last year, even though last year was lousy.

Hopes of a turnaround faded in the summer smog. Hotel rooms went begging in downtown Los Angeles while amusement parks in Orange County struggled in the wake of the Los Angeles riots, the Landers earthquake and chronic economic weakness.

Televised images of burning buildings and shaking earth made California a tough sell for travel agents. Faced with slack demand on a weekly charter flight to Los Angeles from Minneapolis, MLT Vacations chopped the original $289 round-trip price to $99. Even that failed to draw enough takers, and the company switched to smaller aircraft to reduce the number of empty seats.

“It’s the worst year yet for L.A.,” said MLT spokeswoman Judy Glunz.

The tourist slump also affected Orange County, where hotel occupancy rates early in the summer fell below last year’s levels. Tourist traffic was also down at Disneyland in Anaheim and Knott’s Berry Farm in Buena Park.

“Tourism was still off all summer and international tourism was spotty,” said Disneyland President Jack Lindquist. The park was able to redeem itself as Southern Californians flocked to see the much-touted Fantasmic! special effects show.

Knott’s Berry Farm had a poor showing from out-of-town tourists despite the opening of its major summer attraction, a village featuring Native American crafts and exhibits. The park announced last week that it was laying off 30 employees, saying that tourists just haven’t come in the numbers expected.

The once-ubiquitous groups of Japanese tourists were scarce at Universal Studios-Hollywood, as they were throughout Southern California this summer. However, a surge in European travelers taking advantage of the cheap dollar helped the amusement park equal its results of last summer.

“We feel we have done pretty well, given the (business) climate,” said Joan Bullard, a spokeswoman at Universal Studios Hollywood.

Along the coast, some summer beach resorts reported strong business. It wasn’t from out-of-town tourists, however, as much as from Southern California residents seeking sunny skies. Last year, coastal resorts faced overcast skies and unseasonably cool weather that kept beach goers away.

“We had a wonderful summer; I think it’s an anomaly,” said Peter Phillips, general manager of the Surf & Sand Hotel in Laguna Beach. “Weather was a big factor.”

In San Diego, hotels boosted their marketing and advertising in Southern California and Arizona, which generate the lion’s share of the county’s visitors. The San Diego Tourism Assn., a newly formed marketing group supported by a dozen local hotels and motels, is spending $300,000 to lure visitors.

“As long as we’re growing, albeit at 1% to 2% a year, we’re a world apart from the rest of the industry,” said San Diego Convention & Visitors Bureau spokesman Richard Ledford. “That’s not too bad, given the economy.”

Besides additional advertising, summer travelers were showered with discounts, coupons and deals that boosted business for many companies. The airlines, for example, set off a stampede when they cut vacation fares 50% in a summer air-fare war. On a more modest scale, Gray Line Tours filled empty seats after lopping $6 off its bus tour of Hollywood stars’ homes and other attractions.

“It definitely helped,” said Fred Sapir, vice president of Gray Line. But the discounts will eat into profit, and summer results will be no better than last year, he said.

“It wasn’t such a hot year,” Sapir said.

While the summer was tough throughout Southern California, tourist businesses in Los Angeles--particularly hotels--bore much of the pain. In downtown Los Angeles, the hotel occupancy rate was an abysmal 40% in July, according to PKF Consulting. In contrast, the July occupancy rate for the Anaheim area was 72.9%--and that was below last year’s level.

The Los Angeles riots apparently led many people to abandon hotels in central Los Angeles in favor of suburban areas, according to hoteliers. The 900-room Los Angeles Hilton Hotel & Towers, for example, failed to meet occupancy projections while its suburban sisters in Anaheim, Universal City and Pasadena exceeded expectations, said spokesman Neil Cohen.

“It seems people came back faster to Los Angeles than anticipated after the riots,” said Bruce Baltin director of PKF Consulting in Los Angeles. “But they stayed in outlying areas. If people stay in the outlying areas and get comfortable . . . it will hurt downtown in the long term.”

Travel Spending

California saw spending on travel goods and services slow down in recent years after enjoying dramatic growth during much of the 1980s.

Travel spending, 1992 estimate: $56.1 billion

Source: California Department of Commerce and First Interstate Bank

Contributing to this story were staff writers Chris Woodyard in Orange County and Greg Johnson in San Diego.