Businesses ask if L.A. tourism will ever recover
HOLLYWOOD — If you build it, will they come? That’s the question waiting to be answered at Hollywood & Highland, but with the nation and the world reeling from an awful season of terrorism, war and recession, it’s probably one that won’t be answered for months, or even years.
The $600 million shopping, entertainment and tourism destination opened for business earlier this month, capping a decade of planning and construction that has made the site the emblem of the city’s hopes for a revitalized Hollywood.
Tourism was always the core of the business plan: the famous intersection, with its Walk of Stars and the hand- and footprints in the Mann’s Grauman’s Chinese Theater forecourt, was the second-most-visited spot in Southern California, attracting 10 million visitors each year by some counts, including millions of foreign travelers.
But most international tourism ended Sept. 11, and officials don’t expect it to recover to anything near regular levels for the better part of a year, at the earliest. That’s bad news for owners of businesses at the mall who had hoped the new destination would convince tourists to stay in Hollywood longer and spend more.
“It’s a foregone conclusion that we’re not going to have a recovery of the foreign tourist market until next summer,” says Leron Gubler, president and CEO of the Hollywood Chamber of Commerce. “It stopped on Sept. 11, and it’s only just starting to trickle back now.”
In response to the sudden and sharp reduction of foreign and domestic tourism to Southern California, the Los Angeles Convention and Visitors Bureau has brought its focus closer to home. Retooling a $1.3 million advertising campaign, the bureau is targeting what travel industry experts call the drive market in California and Nevada .
“This is our biggest program ever, but we see it as the only way to go right now,” says Robert Barrett, vice president of domestic marketing for the convention bureau.
About half of the mall’s intended complement of some 70 retail shops, restaurants and nightclubs had moved in by opening day in early November. The rest are expected to open during the next few months, according to spokespeople. Most had to adjust expectations for sales somewhat, given the depressed tourist trade, and are shifting their hopes to the local market of area residents and entertainment industryites.
“Tourism is likely to be down, but that’s not a huge part of our business,” allows Bob Spivak, president and CEO of the Grill on Hollywood, sister restaurant to the upscale Beverly Hills industry eatery the Grill on the Alley. “We don’t believe our price structure lends itself to the tourist demographic.”
California Pizza Kitchen was hoping to draw in tourists who are becoming increasingly familiar with the 130-restaurant chain. Now, like all the businesses at Hollywood & Highland, it’ll have to rely on local diners to pick up a bigger part of the tab.
“California Pizza Kitchen is an everyday kind of place and this is our hometown,” says Sarah Goldsmith, senior v.p. of marketing and p.r. “We have great brand awareness here.”
Building new image
Apart from the acute economic and political problems, area business owners have other problems to overcome if they want to see Hollywood & Highland succeed, such as a long-held perception that the area is rundown and dangerous. The Hollywood Entertainment District, a consortium of area business and property owners, has already started to combat that image, most importantly by hiring armed security personnel to patrol the neighborhood.
While it remains to be seen whether the local populace will make Hollywood & Highland a regular stop on their shopping and dining rounds, there are already some positive signs: The new mall will likely benefit from a resurgence of trendy clubs and bars in the area.
“Nightlife is taking hold, and that’s a common precursor for revitalization of retail businesses and restaurants in a neighborhood,” says Kerry Morrison, entertainment district exec director.