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2. Travel Displacement and Need to Seek Affordable Lodging Elsewhere: Rising hotel rates and limited availability could push some visitors to look for more affordable accommodations in nearby cities. With the increased demand and rising prices in Santa Ana's hotel sector, neighboring areas like Anaheim or Irvine may absorb some of the overflow but would also likely experience upward rate pressure, creating a ripple effect across Orange County. Given that Orange County's occupancy was 72% on a year-to-date basis and RevPAR was $151 and shows high occupancy figures in all months - with only January falling below 70%, hotels in adjacent areas to Santa Ana are likely to be at full capacity during peak seasons, especially July10, or major events. As a result, tourists may find themselves traveling farther for budget -friendly lodging, potentially discouraging some visitors from choosing Santa Ana altogether. In addition, group room demand in California was up a robust 7% relative to September 2023. Orange County saw this increase by 35% year on year for the month of September 202411. This strong local growth in demand is reflected by the fact that approximately 650 of the AirBNB listing in Santa Ana are for 2+bedrooms, so suitable for grouPS12. The loss of this accommodation type may not be easily substituted within the existing local supply, which could, as a result, spurn additional local development. The available evidence and analysis allows a reasonable conclusion to be drawn that in the short term visitors will be pushed away from Santa Ana due to occupancy restrictions and increased rates, and in the longer term these constraints could result in new hotel capacity development. 10 https://rabbu.com/airbnb-data/santa-ana-ca 11 https://industry.visitcalifornia.com/research/report/monthly-travel-indicators-summary 12 Santa Ana, Airbnb Market Statistics & Data, United States 5/5