Local Firms Brace for a Slowdown

With no games to show on its 64 televisions and four big screens, the National Sports Grill in Orange told two-thirds of its weekend staff to stay home.

The banquet halls on the Queen Mary won’t be packed this weekend either. Already, two big business gatherings, the Latino Beach Festival and a wedding, were called off.

It’s the “uncertainty and the national neurosis,” said Jeff King of King’s Seafood Co., who’s expecting his 12 restaurants in Southern California to drop 40% in business Saturday and Sunday because of cancellations.

Across Southern California, business operators are bracing for the worst in the first weekend after the terrorist attacks shook the nation. Although some businesses--notably movie houses and real estate brokerages--say they’re expecting normal traffic, many others already have received a slew of cancellations and reductions for the weekend and beyond.

Some of that was expected because of problems with air travel and the jittery mood of many consumers. Business owners hope any downturn will be short term. But if consumers hunker down for a longer stretch, it could have profound implications for the economy.

Restaurants and bars may see the biggest immediate impact because of the mass postponement professional and college sporting events this weekend.

The 10,000-square-foot National Sports Grill, a stone’s throw from Edison Field in Anaheim, expects to lose well over $100,000 in the first week after the terrorist attacks, said manager Johnnie Atkinson.

One party that won’t be there Saturday is the Purdue Booster Club, an area alumni group that had reserved space for some 300 die-hard fans to watch the Boilermakers play Notre Dame. But like all major college football games, that one was postponed.

“Basically, we’re empty,” Atkinson said Thursday.

Many hotels in the region, which are coming off a strong summer, also will have plenty of vacancies this weekend, because business and private gatherings aren’t showing up.

At the Millennium Biltmore Hotel in downtown Los Angeles, which was to be headquarters for the Latin Grammy Awards this week, a dozen or so events were canceled and 500 to 600 room nights--or occupancy per room per night--were lost, said Stephen Haller, the hotel’s director of sales and marketing.

“It wasn’t going to be a super-busy week, but that would have put us at around 70% occupancy,” Haller said.

The list of business meetings absent this week was extensive. The Personal Communications Industry Assn. of Alexandria, Va., scrapped plans to welcome 2,000 delegates to the Los Angeles Convention Center because they were scheduled to begin Tuesday, the day of the attacks.

The Anaheim Convention Center said it has lost two major conventions, including 3,000 expected for the Kawasaki gathering this weekend. Many of the convention visitors had booked rooms at the Anaheim Hilton and the Anaheim Marriott. Kawasaki hasn’t rescheduled, said Elaine Cali, spokeswoman for the Anaheim/Orange County Visitor and Convention Bureau.

The Rancho Bernardo Inn, just south of Escondido in San Diego County, had been sold out for the weekend.

“We really had pretty much a wipeout for this week,” said Rick Mansur, senior vice president of J.C. Resorts, which owns four Southland hotels. “All the groups that were due in this weekend canceled.”

Bruce Baltin, senior vice president at PKF Consulting, a research firm for the hospitality industry, estimates that hotels in Los Angeles County will lose a full third of their business this weekend. That translates to lost revenue of about $5 million. That doesn’t include an additional $20 million that would have been spent on food, entertainment, taxis and souvenirs, he said.

“The next two weeks will be pretty desolate in terms of hotel occupancy,” he said.

Bob Rauch, whose firm owns and provides financing for hotels, thinks groups will continue to cancel reservations for the next six to eight weeks. The reasons: a lingering sense of mourning, fear of flying and an uncertainty about the airlines’ ability to handle heavy volume, he said.

There were pockets of optimism, however. Managers of shopping centers, movie theaters and car dealerships said consumers were still out and about after the terrorist attacks, although they still described traffic as fairly light.

Bob Laemmle, owner of Laemmle Theatres in Los Angeles, said business dropped off dramatically Tuesday but bounced back the next day. He doesn’t foresee consumers putting away their wallets.

“I think people are anxious to get back to a normal type of life and might want to do something more than watch 18 hours of TV a day,” he said.

Real estate brokers across the Southland said they expect open houses will go on as usual this weekend. Despite scattered reports of some cancellations, a large number of homes will remain open on both days, brokers said.

Jim Graham, owner of Santa Margarita Ford in Rancho Santa Margarita, sold six new cars Wednesday, normal for an early September weekday.

“We might have seen the end of the group of serious buyers who were in the market last week and are just wrapping things up,” he said. “But what we don’t know is whether there are customers for next week.”

“It’s very slow, but that’s to be expected,” said Samuel Davis, new-car sales manager at Costa Mesa Mitsubishi. “This is a time for people to gather together and reflect on things, and that means that business, for a while, won’t be as usual.”

The hit to tourist destinations such as Palm Springs was even harder.

“It’s basically empty around here,” said Johnny So, general manager of the 800-room La Quinta Resort & Club, which does more than 70% of its business with groups from out of town.

The hotel, which expected to have about 600 rooms filled this week, had only 100 occupied. About 10 groups ranging in size from 25 to 300 people have canceled meetings, So said. So far, no meetings in late September or October had been canceled, he said, but group organizers were cutting their estimates of the number of participants.

So’s bottom line: about $1 million in lost revenue this month.

Kathy Schloessman, president of the Los Angeles Sports and Entertainment Commission, was among those left holding the bag for the many festivities related to the Emmy Awards, which had been scheduled for Sunday. She planned to host 1,400 guests Saturday night at a pre-Emmy party on the Sony lot in Culver City.

But the cancellations of her long-planned party and other events that would have been a boon to the city didn’t get her too upset.

“It’s really hard to complain at all about this, because everybody who is still in business has the opportunity to make that back up,” Schloessman said. “How can you complain if you’re still alive?”

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Staff writers Abigail Goldman, E. Scott Reckard and John O’Dell contributed to this report.