United States -  Los Angeles - Long Beach

Los Angeles is a major global center for business, entertainment, international trade, media, fashion, science, technology, and education. The Los Angeles hotel market (defined as Los Angeles County) is one of the largest in the United States and includes a variety of dynamic hotel submarkets, ranging from world-famous luxury destinations in Santa Monica, West Hollywood, and Beverly Hills to the coastal communities of Malibu, Venice Beach, Manhattan Beach, and Hermosa Beach, as well as smaller and more industrial areas to the south in Long Beach and to the east in the San Gabriel Valley. Following declines in 2009, concurrent with the local and national economic downturns, market-wide RevPAR registered steady year-over-year growth from 2010 through 2019, resulting in occupancy levels approaching 80% in 2019. It should be noted that the Los Angeles market realized the quickest occupancy recovery among all major Southern California markets after the Great Recession. Growth continued in the last decade despite steady increases in supply, particularly in the submarkets of Downtown L.A., Hollywood, and West Hollywood. Furthermore, the market experienced some headwinds in 2019, as leisure demand levels were weakened by a rainy winter and as business travel was affected by the trade war with China.

Travel and visitation slowed significantly in 2020 as a result of COVID-19; thus, the market ended the year with an occupancy of 48.9% and an ADR of $138.95, reflecting a RevPAR decrease of 52.6% when compared to 2019. In Los Angeles, many small and large businesses, as well as the entertainment industry, were significantly affected by strict government restrictions implemented to reduce the spread of COVID-19. Group events at area hotels and at the Los Angeles Convention Center were canceled through mid-year 2021; however, re-bookings started in the fall of 2021. As of year-end 2021, occupancy and ADR had begun to rebound in earnest, with each month showing significant improvements over 2020, but still falling short of the market's 2019 performance. Our analysis of recovery trends in this market reveals that RevPAR in Los Angeles should rebound to 2019 levels by 2023, primarily due to rapid increases in ADR in recent months. Over the long term, the popularity of numerous submarkets within Los Angeles, limited supply increases, the diversity and strength of the local economy, and strong tourism should support a recovery in the lodging sector. The return of in-person "awards season" galas and events, the 2022 Super Bowl, and the 2028 Olympics should also boost lodging demand over the longer term.

* Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent “big picture” data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Change In Value For Market:

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: More than -10%

For more information, please contact:

Luigi Major, MAI
Managing Director
Valuation, Market & Feasibility Consulting
[email protected]
  • +1 310 270-3240 (w)
Kirsten Smiley
Senior Vice President, Southern California Region Director
Valuation, Market & Feasibility Consulting
[email protected]
  • +1 405 612-6255 (w)
Daniel MacDonnell
Managing Director
Capital Markets
[email protected]
  • +1 310 855-4224 (m)