Tom York on Business: San Diego Shines, Bucks Statewide Decline in Latest Hotel Sales Survey
Tom York on Business: San Diego Shines, Bucks Statewide Decline in Latest Hotel Sales Survey
The president of Orange County hotel broker Atlas Hospitality Group has some good news for San Diego’s all-important hospitality sector.
He says that sales of hotels in San Diego were up nearly 28%, according to his Atlas annual 2023 Year-End California Hotel Sales Survey.
“San Diego County stands out in our 2023 survey as it saw the highest increase in the median price per room of any of the counties in the state- up 27.5,” Alan Reay told the Times of San Diego.
“This shows how desirable hotels in the region are to investors as many view the market as having a much more diverse economic base than most of the other markets in the state, that is not heavily relying on any one industry, such as tech ( see what has happened in San Francisco and San Jose, for example).”
“We see the demand for San Diego hotels continuing for all product types and locations,” he said. “It’s hard to see weakness in the local market and with all of the negative publicity we are seeing in cities like San Francisco, Los Angeles and Oakland (crime and homeless),
“This will only drive more meetings/convention business to San Diego” he concluded.
San Diego had a near 24% decrease in individual hotel transactions, to 26 from 34 in 2022.
Total dollar volume was down 42%.
The county’s average price per room increased by 8%, but the median price per room increased by 27.5%.
He cited a couple of sales in his report.
The 225-room Four Points San Diego on Aero Drive was the largest hotel sold at $13 million.
The 85-room Inn at Rancho Santa Fe was the highest price paid at $100 million.
Overall, hotel sales statewide weren’t all that strong, he said.
Some of the highlights of this year’s survey as far as the California market is concerned:
- Second largest percentage decline in individual sales in the last 15 years, down 45% over 2022;
- Sales volume declined by 56%, the second steepest decline in sales volume in the last fifteen years.
- Median price per room at $150,000, down more than 1% over 2022.
- The highest price sale was the $720 Million paid at foreclosure by the lender for the 400-room Fairmont Hotel in Los Angeles.
Hotel sales are one indication of the overall health of the local economy, says Reay.
