The San Francisco Bay Area emerged as one of the strongest lodging markets in the U.S. over the past decade because of its robust economy, designation as a top-tier travel destination, and high barriers to entry. The Bay Area’s diversified economy has been led by the technology sector, which is spread throughout this region, driving continued employment gains. Additionally, more venture capital has been attracted to San Francisco than any other city in the U.S. in recent years. Convention and tourism demand also reached record levels in 2019. RevPAR increased exponentially over the past several years, mainly driven by double-digit ADR gains. In 2016, occupancy remained flat while ADR grew at a more modest pace, registering the slowest growth rates since 2009. Both occupancy and ADR declined in 2017 given the renovation and expansion of the Moscone Center, as well as the entrance of new supply. Occupancy continued to decline in 2018, but ADR increased for the year, as local hoteliers worked together to book in-house groups to lessen the impact of the convention center renovation project. Given the record convention year in 2019 following the renovated facility's full opening in January, RevPAR reached a new peak, with an exceptionally strong first quarter driving above-inflationary rate growth for the year.
The COVID-19 pandemic significantly affected the greater San Francisco Bay Area lodging market, as evidenced by the nearly 64.0% RevPAR decline in 2020. San Francisco was one of the first cities to implement a shelter-in-place mandate mid-March and impose limits on gatherings and business activity. All major conventions after March 2020 were canceled or postponed, with an estimated impact of nearly $700 million in lost spending. Hotels were prohibited from accommodating non-essential business travel for portions of 2020 and 2021. While occupancy and ADR slowly improved throughout 2021, RevPAR remained significantly below pre-pandemic levels. Performance metrics trended upward in 2022, supported by the return of tourism and meeting/group business. However, office vacancies have continued to rise, remaining at record levels, and many companies are still implementing hybrid workforce policies. In addition, significant layoffs and hiring freezes occurred in late 2022 and early 2023. A strong convention schedule should bolster performance in 2023, but the weak booking pace for 2024 is expected to lengthen the recovery. While the near-term market outlook is unfavorable, the market remains well positioned for a stronger recovery in the long term because of San Francisco’s diverse economy and popularity as an international tourist destination.
* 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.
The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide.
Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the
hospitality investment market.
In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely
insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related
restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.
Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with
an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide
insights on the likely trajectory of decline and recovery for hotel values.
For the Latest Information and Analysis on the Impact of COVID-19Click Here
If you’d like to speak to someone personally to review details of our most current analysis, please don’t hesitate to contact
us directly.
ADR, Demand, Occupancy, RevPAR, and Supply Projections:
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ADR Change
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Market Demand Change
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Hotel Occupancy Increase/Decrease
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RevPAR Change
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0.0%
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0.0%
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0.0%
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Market Supply Growth
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Change In Value For Market:
Legend
Significant Value Increase:
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Greater than +10%
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Moderate Value Increase:
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Between +3% and +10%
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Stable Values:
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Between -3% and +3%
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Moderate Value Decline:
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Between -3% and -10%
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Significant Value Decline:
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More than -10%
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San Francisco - San Mateo RevPAR Change
San Francisco - San Mateo RevPAR
Year |
RevPAR |
2007 |
$111.24
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2008 |
$117.19
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2009 |
$95.01
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2010 |
$102.26
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2011 |
$122.37
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2012 |
$137.89
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2013 |
$155.24
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2014 |
$174.85
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2015 |
$188.00
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2016 |
$194.51
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2017 |
$189.69
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2018 |
$184.97
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2019 |
$199.07
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2020 |
$209.13
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2021 |
$
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2022 |
$
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2023 (f) |
$
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2024 (f) |
$
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2025 (f) |
$
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