Orange County Hospitality Market Report

Household budget tightening impacts local hotel dynamics. Mirroring its coastal Southern California counterparts, Orange County registers a year-over-year improvement in hotel demand. However, unlike Los Angeles and San Diego, the metro’s progress toward a pre-pandemic level of demand is largely fueled by a noteworthy rise in limited-service occupancy. Escalating amusement park ticket prices, including the average Disneyland entry cost hovering around $150 a day, are likely to prompt more families to opt for lower-cost lodging to somewhat offset the price of park visitations. As such, economy and midscale hotels are each positioned to record occupancy gains exceeding 600 basis points this year. Expectations for household budget tightening may also benefit the upscale and upper upscale segments, as Southern California families may choose to take weekend vacations locally in lieu of longer trips elsewhere, aiding resort-style hotels along Highway 1. Together, these dynamics, along with a full slate of events at the Anaheim Convention Center, will translate to a more than 5 percent annual rise in room nights booked — the largest gain since 2010, when excluding the pandemic recovery-induced improvements noted in 2021 and 2022.