Ojai Valley Inn Returns to the Years of Luxury : Resorts: The hotel has many pasts from Hollywood retreat to soldiers’ barracks. New owners now are trying to boost it from obscurity.

The lush Ojai Valley, about 90 minutes north of Los Angeles and 14 miles inland from Ventura, has been a favored spot of the Hollywood community for many years.

Filmmaker Frank Capra used Ojai as the setting of the mythical paradise Shangri-La for his 1937 film “Lost Horizon.” In 1952, when Spencer Tracy and Katherine Hepburn sparred over golf shots in the movie “Pat and Mike,” they were standing on the terrace of the Ojai Valley Inn & Country Club, the centerpiece of the mountain-rimmed valley. Recently, a few scenes from the upcoming sequel to “Chinatown”--”The Two Jakes”--were filmed at the inn.

The 67-year-old Ojai Valley Inn has been frequented by Clark Gable, Walt Disney, Lana Turner and Nancy and Ronald Reagan. At one time the 220-acre resort, a rural retreat located in the town of Ojai (pop. 7,909), which these days is best known as an artists’ colony, was owned by a consortium from Hollywood that included Loretta Young and Hoagy Carmichael.

Nonetheless, over the years the resort remained virtually unknown outside of Southern California and by 1986 it had fallen into a rather shabby state of repair.

In stepped the billionaire Crown family of Chicago, which first bought a stake in the hotel in the 1940s and completed its purchase in the mid-1980s. Since then, the Crowns have spent another $35 million to expand and renovate the inn’s Spanish-style adobe buildings and restore its 18-hole golf course.

Golf holes were moved to avoid having to chop down any of the old oak trees that line the fairways. The number of guest rooms was doubled to 218, the old rooms were gutted and refurbished, the red-tile floor in the hallways and original lobby was uncovered and restored, and a conference center that seats up to 550 people was added. The resort now has two pools, a Jacuzzi, a fitness center, eight tennis courts and two restaurants.

But since the inn was reopened in July, 1988, it has faced a more daunting challenge: How to attract leisure travelers and business groups from all over the country when other Southern California resort hotels such as the Santa Barbara Four Seasons Biltmore, La Costa Hotel & Spa, and Rancho Bernardo Inn in San Diego County are far better known.

“The biggest problem of Ojai is outside L.A., nobody knows where it is,” said Ron Drake, vice president of sales and marketing for New York-based Hilton International, which supervised the renovation and manages the inn. “When you ask somebody in New York, they can’t even pronounce it,” Drake said .

Executives at the Ojai (pronounced OH-hi) Valley Inn are battling the inn’s obscurity with a $300,000 advertising and marketing campaign that includes placing ads in such publications as the Wall Street Journal, the New Yorker, Sunset magazine and Golf Digest. They also use direct mail and have stepped up efforts to lure travel writers and the all-important meeting planners of businesses and trade associations to Ojai.

Success won’t come easily for the inn, hotel industry veterans say. “One of the problems you have when you reposition a hotel is it’s almost like starting over again,” said David Brudney, a Palos Verdes-based hotel consultant.

Repeat business is the lifeblood of any hotel, Brudney said. But when the Ojai Valley Inn closed for two years and reopened with higher rates and more amenities, it likely lost many former customers, he said.

Members of the Crown family were unavailable for comment. But Alex Frankel, director of marketing at the inn, said he expects the inn to take in $16 million to $17 million in revenues this year, with an operating profit of about $2 million. Even so, Frankel said, that won’t be enough to service the debt stemming from the renovation.

Saul Leonard, a national partner specializing in leisure industries at the accounting firm Laventhol & Horwath in Los Angeles, said Ojai’s renovation was needed to bring the inn up to the standards of newer resorts. “The hotel industry has just gone through a decade of the greatest number of rooms built,” Leonard said. “The commitment had to be made to be competitive in today’s market, but it’s going to take them a long time to get that money back.”

Leonard also warned that Ojai has a disadvantage in that it’s far less accessible than resorts in Santa Barbara, San Diego and Palm Springs. Ojai is more than a 30-minute drive from Santa Barbara’s airport, the closest facility catering to national commercial flights.

Dick Calgaro, vice president of Krisam Group, a Washington-based hotel sales and marketing organization whose clients include Ojai, La Costa and the Hotel del Coronado, admitted that Ojai can be a tough sell because of its remote location. “You really have to push it a little harder,” he said.

But Frankel said the Crown family remains committed to the property. “They wanted to recreate a deluxe, low-key resort north of Los Angeles. They’re in it for the long haul,” Frankel said.

The Crown family has enough money to do whatever it wants. Its businesses are headed by Lester Crown, 64, son of Chicago financier Henry Crown, 93, who built a sand and gravel firm that was sold to defense contractor General Dynamics Corp. in 1959. Today, the family oversees an empire that includes a 22% stake in General Dynamics, other stock holdings and real estate. Forbes magazine ranks Lester Crown and his family on its list of the 400 richest Americans, estimating the family’s net worth at $2.15 billion.

Frankel said the Ojai Valley Inn currently averages a 65% occupancy rate and room prices, which are advertised at $180 to $240 a night for standard rooms and up to $760 for a suite, actually average about $150 a night because of group discounts and special packages.

Although these rates aren’t bad, 75% occupancy at $200 “would be nice,” Drake said. That would put Ojai in the league of the Santa Barbara Four Seasons Biltmore, the waterfront resort hotel 30 miles northwest of Ojai.

Ed Galsterer, spokesman for the Santa Barbara Biltmore, argued that Ojai has a long way to go to be considered in the same class as the Biltmore or other top California resorts such as the Ritz Carlton Laguna or the Spanish Inn at Monterey. “The competition we see is from the luxury resort hotels. I don’t think Ojai fits that description,” Galsterer said.

That distinction can be crucial in the competitive California resort market. The Automobile Club of Southern California, the regional affiliate of the American Automobile Assn., rates hotels on a one-to-five “diamond” scale, with five diamonds being the best. In Southern California, there is only one five-diamond establishment, the Ritz Carlton Laguna, but there are 67 four-diamond hotels and 510 three-diamonds. The Ojai is rated three diamonds.

The inn is also one of 59 California establishments given four out of a possible five stars by the Mobil Travel Guide, another well-known ratings system.

Such ratings are important because they are often used by meeting planners when they are scoping out resorts for business and association gatherings. Those groups are important to Ojai because they can account for up to half of its bookings.

Frankel said a large part of his job since he joined the hotel in 1988, after stints at La Costa and other resorts, has been to attract those groups. It’s been slow, he admitted, but already this year bookings exceed the entire group business done in 1989.

Also, Frankel said, the inn got a boost last December when the GTE West Golf Classic, a Professional Golf Assn. senior event, was held for the first time at Ojai, putting the resort on national television. The inn is currently negotiating to bring the tournament back for two more years.

The Ojai Valley Inn & Country Club was built in 1923 by Edward Drummond Libbey, a glass tycoon from Ohio. Libbey commissioned Pasadena architect Wallace Neff, who also designed the Pickfair home for Mary Pickford and Douglas Fairbanks, to build the inn and clubhouse as a replica of a Spanishhacienda. Billy Bell and George C. Thomas Jr., who also designed the Riviera and Bel-Air Country Club golf courses, designed the resort’s golf course. The inn was closed down during the Depression, and during World War II it was used to house soldiers. After the war, a consortium of new owners, including the Crown family, reopened the hotel.

Drake of Hilton International admitted that building recognition and repeat business will be “a long process” for Ojai. “La Costa is well known because it has done a very good job of marketing itself. But it’s taken place over a number of years and they spent a lot of money to do it. We just have to keep slugging it out and it becomes a question of time,” he said.