Labor Day weekend is supposed to be the beginning of the tourism season in Palm Springs, one of the most popular vacation destinations on the West Coast.
But this year it looks like last year’s tourist season never really ended.
In fact, you know Palm Springs tourism is on a roll when Facebook multimillionaires start investing in it.
Meet Ezra Callahan, a 31-year-old techie who was lucky enough to be the sixth employee at Facebook. His 0.08% of the company has been estimated by the Los Angeles Times to be worth $80 million dollars.
Not bad for a guy whose previous job was for his campus newspaper at Stanford.
And Callahan’s next investment in this Desert oasis. Last week, he and his architect Chris Pardo unveiled their plans for a hip, new hotel and restaurant at 1551 N. Palm Canyon, between Vista Chino and Stevens. Their 32-room contemporary hotel, called “ARRIVE,” is significant because it will anchor the north end of the Uptown Design District – itself a major hit that has seen one restaurant and retailer after another splash new life onto the Desert scene.
So why invest in Palm Springs?
‘It’s an area that’s been on the upswing lately and initially our interest just comes from enjoying being in the area,” Callahan told me.
He added, “Of course we’ve done some research, and one of the things that appeals to us is just how much opportunity there is here. It’s been riding a wave for a few years now but there’s so much more that can be done. It’s kind of a new set of people visiting. The millennials have discovered Palm Springs. There’s a lot of new opportunity to serve this new wave.”
In their research, Callahan and his team surely saw the tourism rebound that the locals have noticed for some time. Just last week The Desert Sun reported Palm Springs’ hotel occupancy jumped to 48.7% in July, with the average daily room rate up 0.6% to $93.33, while competing cities like Phoenix and Las Vegas were down.
Callahan says Palm Springs has become an alternative to Las Vegas for many of his friends, and, he says, we’re an especially hot destination for events like bachelorette parties.
And why not? Mary Jo Ginther, director of the Palm Springs Bureau of Tourism, told The Desert Sun last week, this is “a destination that has about 23 or 24 million people within about two hours.”
And as for those who don’t drive here, the Palm Springs airport saw 17.6% more passengers in July than the same period a year ago.
Then there’s the smart money pouring in like Callahan’s and others.
Palm Springs heads are still spinning over the recent sale of the historic, 57-room Colony Palms Hotel. It sold for an astounding $15 million dollars to Los Angeles investors who have a strong track record in the industry. As one city official told me, “Those are Beverly Hills prices.”
And it’s not just boutique hotels benefitting from the upswing in tourism. Renovations at the Hyatt Regency, the Hilton, the Saguaro and soon at the Zoso were possible because of the city’s hotel incentive program which gives them future tax breaks, a program pushed by Mayor Steve Pougnet.
As for the newest project, ARRIVE, investor Callahan is working his way through the city’s approval process and he hopes to open in the middle of next year.
And, smart investor that he is, he says he’s already thinking about other business opportunities here in Palm Springs as well.
“We’ll certainly be looking around,” Callahan says, “that’s our nature. We want some other ideas. One of the things we talked to the city about is we really hope our investment gets the attention of others.”
I think it’s safe to say it already has. ###