Occupancy runs 75%, up 6 percentage points over 12 months

By JONATHAN LANSNER | jlansner@scng.com | Orange County Register
PUBLISHED: August 13, 2022 at 7:24 a.m. | UPDATED: September 1, 2022 at 10:35 a.m.

”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.

Buzz: Hotel room rates are heating up this summer in many places across California.

Source: My trusty spreadsheet reviewed one-year changes in hotel room rates and occupancy levels for 2022’s first half in 19 markets, compiled by Visit California.

Topline

The urge to get out of the house helped push California’s average hotel room rate up 25% to $200 a night in 2022’s first six months. Travelers didn’t seem to mind, with occupancy at 75%, up 6 percentage points over 12 months.

That’s a slightly bigger bump than what hotels nationwide saw — a 19% jump in rates to $155 as occupancy ran 70%, up 4 points.

Details

So where did visitors see the biggest rate jumps within California? Mostly in markets on a pandemic rebound.

Largely, that meant coastal and urban sites once shunned in the height of 2021’s pandemic business limitations. Or it was in places where local attractions had limited operations last year. Think Disneyland.

And don’t forget a modest return to business travel this year.

No. 1 San Francisco: 65% jump to $269 (7th most expensive). Occupancy was 75%, up 31 percentage points.

No. 2 Anaheim: 32% jump to $235 (No. 8). Occupancy was 83%, up 28 points.

No. 3 West Hollywood: 31% jump to $396 (No. 3). Occupancy was 70%, up 10 points.

No. 4 Los Angeles: 30% jump to $218 (No. 10). Occupancy was 77%, up 10 points.

No. 5 Napa Valley: 22% jump to $501 (No. 1). Occupancy was 72%, down 1 point.

No. 6 Long Beach: 21% jump to $178 (No. 12). Occupancy was 81%, up 2 points.

No. 7 Newport Beach: 20% jump to $379 (No. 4). Occupancy? 64%, up 2 points.

No. 8 Santa Monica: 20% jump to $419 (No. 2). Occupancy was 76%, up 10 points.

Smaller increases inland can be tied to their popularity a year ago when travelers sought less-densely populated places to visit.

No. 9 Sacramento: 19% jump to $137 (No. 17). Occupancy was 68%, down 3 points.

No. 10 Fresno: 14% jump to $129 (No. 19). Occupancy was 66%, down 8 points.

No. 11 Redding/Chico: 12% jump to $131 (No. 18). Occupancy was 67%, down 13 points.

No. 12 Temecula: 11% jump to $169 (No. 14). Occupancy was 76%, down 4 points.

No. 13 Monterey/Salinas: 11% jump to $297 (No. 5). Occupancy was 77%, up 2 points.

No. 14 South Lake Tahoe: 10% jump to $179 (No. 11). Occupancy was 62%, down 11 points.

No. 15 Santa Barbara/Santa Maria: 9% jump to $295 (No. 6). Occupancy: 79%, up 2 points.

No. 16 Tulare/Visalia: 8% jump to $138 (No. 16). Occupancy: 80%, down 5 points.

No. 17 Eureka/Crescent City: 6% jump to $143 (No. 15). Occupancy: 69%, down 15 points.

No. 18 San Luis Obispo/Paso Robles: 6% jump to $229 (No. 9). Occupancy: 76%, down 1 point.

No. 19 Palm Springs: 4% jump to $170 (No. 13). Occupancy: 52%, down 2 points.

Bottom line

How long travelers will pay more to play is the industry’s grand question. A soft economy with high inflation will certainly throttle many household spending plans.

Hotel developers have taken a sour view, especially with borrowing costs soaring.

In 2022’s first half, 116 California hotels were under construction — with 15,958 rooms — down 12% in a year, according to Atlas Hospitality. And 1,248 California hotels were in the planning process — with 162,831 rooms — up 1% in a year.

Atlas analyst Alan Reay expects many hotel plans will be delayed or canceled in the second half of the year.