Tourists take photos on the Santa Monica Pier on Tuesday afternoon. (photo by Brandon Wise)

DOWNTOWN — Santa Monica’s hotels are nearly 85 percent full and the price per room is rising to levels not seen since before the great recession of 2008, good news for City Hall, retailers and restaurants, many of whom rely heavily on the estimated $1 billion spent by visitors annually.

The city by the sea is fairing far better than many other destinations in the region with an average daily room rate of $255.73 at the end of 2010 compared to $245.84 in ‘09, according to figures released by Colliers PKF Consulting, which tracks hotel trends and statistics.

While that represents a 4 percent increase, it is still far bellow the ‘08 rate of $285.85, but all signs are pointing toward a continued climb back to normalcy, said Brandon Feighner, an associate with Colliers PKF.

“Historically, Santa Monica has always faired well,” he said. “One of the ways Santa Monica has been able to maintain a high level of occupancy … is the incredible barriers to entry. There’s not available land to build new hotels, keeping occupancy levels high. You don’t have new competition cannibalizing the market.”

The city by the sea also attracts a diverse group of visitors, from the strong group meeting market to the leisure traveler with a family. The high quality of hotel options is also a plus, along with Santa Monica’s proximity to LAX and other popular destinations.

“You have a nice mix of affordable to luxury so you are able to capture demand across all segments and all rate levels,” Feighner said.

Santa Monica had the highest occupancy rate of any other city in the region monitored by Colliers PKF with 83.6 percent. The closest was the area near LAX with 80.75 percent. Room rates in Santa Monica were also near the top. Beverly Hills was the most expensive, with $360.46.

City Hall received just over $31 million in 2008-09 and 2007-08 in tax revenue generated by hotel stays.

Experts predict a more robust 2011 with planners anticipating an increase in attendance at their events, according to Colliers PFK. Some are predicting some limited growth in the number of events planned. Fifty percent of planners surveyed said that the economy is no longer affecting their choice of destinations and meeting venues.

Santa Monica Convention and Visitors Bureau president Misti Kerns credits Santa Monica’s rebound to the hotel managers who did not panic and dramatically reduce rates, instead choosing to maintain quality services while offering smaller discounts or incentives.

“They had a plan and followed it through. Now it’s paying off,” said Kerns, whose bureau operates on a budget of $2.4 million and is responsible for attracting guests to Santa Monica. The CVB is funded by taxpayers.

Wolfgang Jonas, general manager at the Fairmont Miramar Hotel and Bungalows, one of Santa Monica’s largest and most luxurious, said lowering rates significantly makes it more difficult to increase them when conditions improve, creating a more sluggish recovery.

“You’re really going uphill,” Jonas said. “People will always be expecting those lower rates.”

Jonas said January was a good month and February is looking that way also as more corporate travelers return.

“We’re very excited about that,” he said.

The Santa Monica Convention and Visitors Bureau told the Daily Press that Australia and New Zealand combined have passed the U.K. as the top market for Santa Monica, with nearly 13 percent of all international visitors here coming from those two countries.

“We’ve been in the market longer than others and it has paid off for us,” Kerns said. “Australians are English speaking, their seasons are opposite ours and they find our lifestyle appealing. And our destination delivers.”

Recently, a team from the CVB and local hotels visited Australia and New Zealand to maintain strong ties as the bureau charts a new course. The CVB now has its sights set on India and Brazil, two emerging markets with economies that are growing.

Still a concern for Kerns is the increase in domestic travelers. They now account for 52 percent of all visitors to Santa Monica compared to 48 percent international. Kerns said the CVB has worked to have a 60-40 mix in favor of foreign travelers because they tend to stay longer, spend more and rely on public transit.

“You have to have both to be successful,” she said.

Another goal of the bureau is to increase the number of jobs supported by tourism locally. Before Sept. 11, 2001, there were roughly 16,000 jobs supported by tourism. That number has since dropped to 9,725, Kerns said.

“We still have a ways to go, but we’re optimistic,” Kerns said.

The re-opening of Santa Monica Place is a plus and should attract more tourists to the area, Kerns said, and a new hotel on Ocean Avenue is scheduled to go online this summer, complete with two new restaurants, spa and fitness center.

Kerns said another boost could come from the federal level in the form of the nonprofit Corporation for Travel Promotion, which will promote travel to the United States and communicate and improve the entry process so that visitors have an easier time getting visas. The corporation is funded by private donations and matching funds from a new fee collected from foreign travelers to the U.S.

According to a report released in February 2010 by U.S. Travel Association/Oxford Economics found that the nation’s failure to keep pace with growth in international long-haul travel worldwide cost the U.S. economy $509 billion in lost spending and 441,000 jobs.

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