United States -  San Diego

San Diego benefits from a diverse mix of demand generated by local corporations, government entities, meeting and group business, and leisure-related activity. Favorable year-round weather conditions and attractions such as the San Diego Zoo, Coronado Island, Pacific Beach, SeaWorld, La Jolla, and the nearby Temecula Wine Valley generate steady tourism demand. Furthermore, compression from large conventions held at the San Diego Convention Center (SDCC) produces a significant number of room nights. Hotel demand and occupancy increased steadily from 2010 through 2018, resulting in peak occupancy levels above 78.0% by year-end 2018. Occupancy declined in 2019, as new supply entered the greater San Diego market; moreover, the drop in occupancy was affected by the rainy winter conditions early in the year. ADR began to rebound in 2011 following the recovery in occupied rooms and increased year-over-year through 2018. In 2018, market-wide ADR reached a new peak above $166, and RevPAR surpassed the $130 mark for the first time, despite a significant increase in supply during 2018. ADR levels stabilized in 2019, while RevPAR decreased by approximately $2.50 given the lower occupancy levels.

San Diego was negatively affected by the onset of the COVID-19 pandemic in March 2020, resulting in a decline in tourism and the cancellation of a number of large-scale conferences, conventions, and self-contained groups. Group events at area hotels and the SDCC resumed mid-year 2021, but attendance remained well below the pre-pandemic levels. Meanwhile, leisure visitation increased substantially, as San Diego benefited from strong domestic travel, as well as the city's relatively relaxed COVID-related restrictions compared to other California markets. RevPAR in 2021 rebounded substantially, as ADR approached the 2019 level. The 2022 data show continued recovery in occupancy and unprecedented growth in ADR, driven by the tremendous increases in transient rate. In the year-to-date period of 2023, occupancy continued to recover, supported by high attendance levels at citywide conventions. However, ADR growth decelerated, partially attributed to the return of lower-rated business and the normalization of pent-up leisure demand. The ongoing developments in the life-sciences sector, the popularity of San Diego as a meeting/event destination, the minimal new supply in the pipeline, and the diversity of the local economy should all support the strength of this market going forward.

* 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:

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:

Kirsten Smiley, MAI
Managing Director, Southern California Region Director
Valuation, Market & Feasibility Consulting
[email protected]
  • +1 405 612-6255 (w)