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Hotel workers won’t fold this bedsheet!
[Ed. Note: We had a massive number of good comments on this week’s still-active “Holiday Weekend Open Thread,” which focused on the proposal that the City Council will hear ONE WEEK FROM TODAY to subsidize Disney for $200 million and Chinese-based developers a combined $300 million to build a total of three “four diamond” level hotels. Our Cynthia Ward, as some readers may not know, had a background in the hospitality business prior to becoming a half-time unpaid blogger (plus some other stuff) and wrote a rip-snorting, well-informed, story-length comment that we now promote to full-story status. She starts by addressing the question of whether the market can even absorb the extra capacity of three four-diamond hotels, to which our commenter David Zenger says no and Ryan Cantor says yes. (See the reasoning in the comments to the linked section — which is almost as learned and productive as people anonymously slinging insults at each other in the comments sections of our competitors.) Then she goes on to improve you the-average-Reader’s understanding of the relevant considerations by about 350% or more, based on data that, in the Anaheim spirit, we’re not releasing. She begins — and remember that “four diamond” is just a way of saying “four-star” while paying homage to your humble Managing Editor:]
On the one hand, the market has not previously supported 4 diamond hotels to the point of anyone wanting to build one with their own money. But today we are entering an age of international business that blurs the lines of cultural divides and draws people from all over the world together. The emerging nations in the hospitality industry are places like India and China, where even the more business rate hotels offer an air of sophistication and elegance.
So when a Chinese investor owns 2 hotels and wants to pump more money into the former Anaheim Plaza hotel, catty-corner from Convention Center and across from Disney, I’m guessing he will draw other high end Chiense business travelers to pull the freight. The Annabella (formerly Magic Carpet and Magic Lamp I think) is an iffy proposition: tucked a half block down in a non prime location, it fights for attention and is unlikely to rise to the top as the top drawer icon of luxury it is claimed to become for that subsidy.
As far as Disney, the idea they won’t build to a 4 diamond level is ludicrous when we consider they have not built anything OTHER than 4 diamond. And by “4 diamond” I mean expensive room rate — because I do not consider the Disney offerings to be true “luxury” in the sense of service level that I would identify as 4 diamond. Disney builds Howard Johnson family style rooms with a nice veneer and a huge price tag, but you are paying for the novelty of being “on property.” Sorry — but, having developed a love for Fairmont Gold Level, Disney does not rate.
One thing makes the entire premise utterly insane. No, I do not refer to the argument that these would or would not be built without free money kicked back from room taxes. (In my mind this is way more outlandish than a mere tax credit. We aren’t forgiving something the hotelier should pay; instead we are giving them free money provided by others and diverted from its intended goal of providing the city services those 20 something million visitors a year expect).
The UTTERLY insane thing is that the subsidy is not tied to collecting a higher room rate, as intended, but is based simply on the construction of the facility.
Consider the difference between Disney’s upscale offering of faux Craftsman with a water-proof coating to withstand the wet bathing suits of Midwestern tourists versus the iconic turn-of-the-century charm of the Canadian Pacific line absorbed by Fairmont. It is the level of SERVICE that makes me willing to spend 400 a night for the latter and “no thanks. I will stay home” for the former.
So one can build a very, very nice hotel that meets the vague qualifications set by Anaheim, skimp on the service level that would push the 3-1/2 diamond offering to true 4 diamond, and provide guests with the nicest damn 3-1/2 diamond room in Anaheim all while undercutting the competition of surrounding hotels paying the full freight of TOT! Thus, Anaheim loses twice! The subsidy not only fails to prevent that outcome — it nearly guarantees it!
If one is forced to recoup higher construction costs for fixtures and furnishings and finishes with nothing but room rate, one is inclined to provide slightly better service to justify the uptick in rate to repay the higher cost. But — if taxpayers of Anaheim are forced to forego our city’s return on investment by kicking it back to the campaign donors of our elected overlords, then we have already provided that return to them. And that provides them the financial foundation they need to write down the room rates — and thus to cannibalize business from the Hilton and Marriott!
Surrounding hoteliers are furious at this — but cowed into silence by a particularly ugly form of “legalized extortion”. When one books a convention in Anaheim, the VCB, now marketing as VisitAnaheim, with the lamest ad campaign ever, will allocate hotel rooms for your convention, assigning guests to lodging choices that the insiders feel are a good fit for the gatherings.
Of course those running the board of the VCB are the same guys sucking up the kick backs. So they can say “shut up and support my subsidy or you don’t get rooms booked.”
This may not be said out loud, it may not even be implied (cough, sputter) — but the fear in the resort is so pervasive that nobody will go on record objecting, despite plenty of behind-the-scenes outrage at this modern day version of, “gee, that’s some good looking occupancy numbers ya got there; sure would be a shame if somethin’ were to happen to all them guests in yer nice place…”.
But what really pisses me off, as a resident, is the idea that Anaheim is measured by the caliber of our hotel stock. That we have such air-headed twits running city hall as department heads that they get all a-flutter that we are getting a JW Marriott! Just as I am disgusted at his little it takes to buy a politician — really, a 1900 max donation and acrylic award with photo and press release is all it takes to make a leader sell out their own citizens? — I amtwice as angry at the city staff sucking up 6 figure salaries while they don’t know Anaheim outside of City Hall. To them, Anaheim is only something to get across on the way from the office to the freeway — windows up, doors locked, don’t make eye contact with the locals.
And those staffers, in their elitist judgement, have declared that Anahiem is “not yet a great city” based not on the caliber of the 350,000 souls that call this 159 year old place HOME — just because we lack someone in a doorman uniform ensuring the brass is polished on the front door!
When John Woodhead, whose job as Director of Community Decelopment is supposed to be promoting Anaheim as a great place to invest and do business, told the world in a May 2015 workshop that Anaheim has to be marked down in the clearance rack, I wanted to go up and over the divider wall and throw his arrogant ass out of the building. In essence, these people have declared that a much-loved child is ugly, fat, and frankly not too bright, and the only way they are going to prom is if mom and dad supply the limo, tickets, dinner, hotel room for after party, alcohol, and maybe some cash for the trouble taken by the unfortunate soul stuck as our child’s hired date.
No, I am not a fan of this mentality. I expect my leaders, both salaried and elected, to see the greatness of Anaheim (or at least our potential for greatness) and get out there and promote the Hell out of it. Create tax money to fix the place up so well-heeled patrons want to be here; provide the real service level desired by someone spending 300 a night and up.
- We have expanded the Convention Center 7 freaking times — but not once have we put in the acoustics to use it as a performing arts center that would draw the upscale patrons we want.
- Shopping? We got key chains and t-shirts.
We half-ass things by offering incentives to the wrong end of the transaction. All the subsidy on earth is not going to score $300-a-night if the other service and environment does not accompany the nice room!
We don’t need to incentivize construction; that will come with market demand — and I believe th global economy will eventually draw the high-end patron. We need to incentivize the patron by building what they want beyond the room. We not only fail at that, thanks to the stripping of our General Fund, but we will also provide guests with an increasingly ghetto-tastic surrounding — with potholes, tagging, delayed response for public safety, etc
A whole lotta people at City Hall need to lose their jobs, NOW. My fear is that by the time we reclaim City Hall in November with a new majority, there will be nothing left to work with. The desks packed up in boxes will come from municipal bankruptcy rather than from the huge housecleaning we need to do.
In short, Anaheim’s executive staff and 3 of 5 its elected leaders would not know class if it bit them in the … hidden Mickey. Greatness is not something you BUY — and it sure isn’t something that you buy with other people’s money!
Regardless of one’s views on the market demand the inevitable conclusion is reached: no subsidy.
To paraphrase William James: if you get to the same result you’re saying the same thing.
There is not one legitimate reason to offer any subsidy to any hotel in Anaheim.
Anaheim residents would do well to take note that SANTA FREAKING ANA offers less of a subsidy than Anaheim.
They’re just giving away your money to their BFFs for no reason.
My friend, Santa Freaking Ana also provides their citizens with more Genreral Fund revenues than the city hosting the “economic engine” these people cannot manage what we give them and burn through the “surplus” of tourism because like the irresponsible adult they write checks based on what they THINK is in the bank account without checking the balance to make sure. (Ever notice when you do that you never UNDERESTIMATE what your balance is?) the difference is, I can be embarrassed at the check stand if my debit card is declined. They use OUR overdraft protection.