SFGATE contributor Randy Diamond recaps the latest in San Francisco hotel news for the column Get a Room

The Ferry Building in San Francisco during sunset. This week in Get a Room, SFGATE’s roundup of news on hotels, we start by examining 2024 hotel openings across California.Joe Daniel Price/Getty Images

By Randy Diamond, Freelance Writer | March 12, 2025

This week in Get a Room, SFGATE’s roundup of news on hotels in San Francisco and California, we start by examining 2024 hotel openings across the state. While debuts have dipped compared to previous years, there’s one type of hotel that’s starting to take off — especially in the Bay Area. Next, we catch up with a San Franciscan hotel investor who scooped up one of the crown jewels of historical downtown properties during the pandemic and is almost ready to reopen its legendary doors. 

Later, we consider the future of San Francisco’s largest hotel — whose owner walked from its mortgage two years ago — before ending by recounting the tumultuous life cycle of a trendy hotel brand that recently folded its San Francisco location (but the Market Street property has already reemerged under a new brand name).

Casinos are a safe bet for California hotels

It’s not just in San Francisco — there has been a dearth of new hotels across the entire state. The Atlas Hospitality Group, a real estate agency that specializes in California hotel sales, found that 2024 was a dismal year for newly constructed hotels and that the trend will likely continue for the foreseeable future. 

Atlas found that 35 hotels opened in 2024, which was down by 34% from 2023. In previous years as the industry was humming, Atlas said that 88 hotels opened in 2021, while 92 opened throughout California in 2019.

None of the hotels that opened in California last year were large luxurious resorts, and for the most part, they were garden-variety chain hotels such as Hilton’s Hampton Inn brand or Marriott’s Fairfield Inn brand. In total, California added 16,468 rooms in 2024. 

Atlas President Alan Reay cited a combination of factors that contributed to the slowdown. “The increased cost of financing hotels, along with a rapid increase in constructions, have made new hotel development very difficult,” he told SFGATE.

“We see this trend continuing in the near future, one to three years at a minimum,” he added.

Nevertheless, there’s an outlier in California’s hotel industry. Casino hotels operated by Native American tribes are betting big within the Bay Area, with the establishment of the largest hotel to open in the state last year.

The 197-room Chicken Ranch Casino Hotel opened last fall in Jamestown, a community of less than 4,000 people in Tuolumne County, about an hour from Yosemite National Park. What made the Chicken Ranch Casino Hotel different, Reay said, was that it was a casino hotel on tribal land. He said the absence of land acquisition purchases reduced the cost of the project, making it less expensive to build.

Reay added that another advantage the Chicken Ranch Rancheria Me-Wuk Indians of California had in building the Chicken Ranch Casino Hotel was that there was no need to pay a major brand to affiliate with for name recognition. He said tribal-owned casino hotels can make it on their own financially, particularly in rural areas where they have near monopoly status.

There are other similar casino projects or expansions in the works. In the final days of the Biden administration, the U.S. Department of the Interior’s Bureau of Indian Affairs gave final approval to the Scotts Valley Band of Pomo Indians’ proposed $700 million hotel casino to be built in Vallejo. The proposed casino is set to be located right off I-80 and across from the Six Flags Discovery Kingdom amusement park.

Another tribe, the Yocha Dehe Wintun Nation, which runs the Cache Creek Casino Resort about 60 miles from Vallejo and west of Woodland, unsuccessfully attempted to block the casino.

Reay said the BIA also approved another Bay Area hotel casino application in January. The Koi Nation plans to build a $600 million hotel casino in Sonoma County near the town of Windsor.

The Graton Resort & Casino in Rohnert Park, Reay said, which is owned by the Federated Indians of Graton Rancheria, is in the process of increasing its hotel size, adding around 400 rooms to the current 200-room inventory. Meanwhile, the Dry Creek Rancheria Band of Pono Indians, owners of the River Rock Casino in Geyserville, is planning to build a 100-room hotel as part of a casino expansion project, River Rock Casino said.

A beacon on Nob Hill

It’s no secret how San Francisco’s hotel market was still recovering in 2024. The San Francisco Examiner reported how room rates, revenue per room and hotel occupancy were still below pre-pandemic levels. In October, for example, monthly hotel occupancy was 64%. In 2019, it was closer to 82% for the same month. The general outlook is that a full recovery is not expected until 2028 or 2029.

But San Francisco has a major hotel project in the works, and it’s something of a beacon on Nob Hill. It proves there is always an exception to the rules, particularly when the hotel is a passion project for local billionaire Greg Flynn. After partnering with hotel developer Highgate in New York, Flynn Properties purchased the shuttered Huntington Hotel atop Nob Hill back in March 2023.

Flynn said “the ground up” exterior renovation began later last year and that a major interior renovation is expected to begin in April. He told SFGATE that the goal is to reopen the hotel by the end of 2025 and return as San Francisco’s leading lodging establishment.

The Huntington closed at the beginning of the COVID-19 pandemic, and it was a sign of a distressed San Francisco. Opened in 1922 on the crest of Nob Hill, the 12-story, Georgian-style brick hotel beams throughout the city with a giant sign advertising itself on the roof. For nearly a century, the Huntington hosted European royalty and rock bands in exile while offering locals a sip of yesteryear elegance with the dimly lit piano bar and restaurant  known as the Big 4.

The hotel and restaurant never reopened during the pandemic. The owner Woodridge Capital stopped making payments on the $56.2 million mortgage from Deutsche Bank. Flynn Properties and Highgate stepped in to buy the mortgage at a discount, but the amount was never disclosed.

Analysts predict that the San Francisco hotel market will begin surpassing 2019 levels in a few years, but Flynn said he has a more long-term vision. “This is for us an asset we will own forever,” he said. “We are taking advantage of the downturn to buy the hotel at a good price, which allows us to invest to make it truly great again.”

Flynn didn’t disclose how much money is being poured into that investment, but he said it’s “major” and that the Huntington will not only have a touch-up but will also return as a completely new hotel. He said the hotel will have the largest rooms in the city, averaging 581 square feet.

“They’re very generous sized rooms,” Flynn said. “The feeling will be like staying in a luxury apartment in Nob Hill.” The suites, which will make up around half of the 143 rooms, will be even larger. Also set to reopen are the spa and the Big 4, with its plush green booths located off the Huntington lobby.

The Huntington’s reopening will also be a victory for the San Francisco hotel workers in the Unite Here Local 2 union. Members are given preference to get their old job back, Ted Waechter, a spokesperson for the union, told SFGATE. These employees will work under the contract negotiated by the union and major hotel chains after a three-month strike last year.

City’s biggest hotel shows signs of new life

San Francisco’s largest hotel, the Hilton San Francisco Union Square, and the city’s fourth largest hotel, Parc 55, have operated without an owner since 2023, when Park Hotels & Resorts announced that it was ceasing payments toward a $725 million loan. However, a resolution is near that will determine their fate.

Real estate outlet the Real Deal reported that a buyer has agreed to purchase the debt on the hotels. The Real Deal did not identify the mystery buyer and quoted a note to bondholders holding $725 million in debt on the hotels. 

Special mortgage servicer Trimont Real Estate Advisors told bondholders that “Offers have been reviewed and a buyer has been selected,” the Real Deal reported. 

Officials with Trimont Real Estate Advisors did not return a comment from SFGATE seeking more information about the sale memo by the time of publication. The receiver, Hotel Asset Value Enhancement and Eastdil Secured, tapped by special servicer to sell the property, also did not return a comment from SFGATE by the time of publication. 

After Park Hotels & Resorts walked away its mortgage, the hotels have been run by a receiver ever since. A court-ordered deadline for a sale is March 31.

After that, formal foreclosure proceedings could begin, and the hotels could be auctioned off. Both hotels are in need of tens of millions of renovations and, due to their position in the Mid-Market neighborhood, are dependent on conventions at the Moscone Center. The San Francisco Business Times reported how San Francisco’s premier convention center isn’t expected to host a full calendar again by 2031.

Any sale of the hotel would likely result in a deep discount for the buyer. A credit report from the Kroll Bond Rating Agency in mid-2024 put the worth of the two properties at about $554 million, down from an appraised value of over $1 billion in 2016.

The Hilton San Francisco Union Square has 1,921 rooms, and the Parc 55 has 1,024 rooms. If a new owner purchased the properties to continue them as lodging facilities, Hilton Hotels would keep operating the facilities. The company has a long-term management operating agreement to run the hotels.

One idea that has been floated is to convert the hotels into housing, but some real estate experts have said that recasting older hotels into apartments is too costly.

However, there’s a local example for a successful partial hotel to apartment conversion — at least for the new tenants. The South Tower of the Signia by the Hilton hotel in San Jose was converted into apartments for around 700 students attending San Jose State University in August. The hotel retained its northern building, which has around 500 rooms and 42 suites.

The Sigma was previously the Fairmont Hotel, which went bankrupt in 2021. However, even with the sale of the South Tower, the Signia by Hilton entered Chapter 11 bankruptcy proceedings in November 2024.

The conversion of the South Tower was a win for San Jose State University, which has grappled with student housing shortages for years.

Dropping the Line

In 2022, the Line Hotel opened in the mid-Market neighborhood. It was a central location for serving a variety of guests looking to visit downtown or explore the neighborhoods, but the front door opened onto complicated street conditions that have impacted much of the district.

Owner Developer SF-based Group i opened the hotel as part of its $380 million Serif project, a 12-story building containing luxury condominiums and hotel rooms. Group i contracted with Soho House, which runs swanky private clubs in London, New York and West Hollywood, to run the hotel as part of its trendy Line brand. 

While the hotel managed to fill its lobby with trendy art and hosted solid programming for locals and guests alike — including a monthly jazz series on the rooftop at sunset — filling rooms was sometimes a difficult sell to out-of-towners. 

Group i principal Leigh Chang told SFGATE last fall that the Line name did not have the name recognition necessary to fill its 236-room hotel. She said a switch to Hilton’s Curio Collection brand, announced in 2024, would hopefully improve occupancy with its worldwide reservation system.

Chang said that the hotel and other businesses along Market Street are pressuring San Francisco officials to reopen the corridor, which was closed to car traffic in 2020 to only allow buses and taxis. A long-awaited series of upgrades to Market Street is underway — including updating street and sidewalk infrastructure while opening a thriving skatepark (of all ideas) — but the timeline is slow, paling in comparison to other major street adaptation projects in California that have proven successful. 

In the meantime, some businesses on Market Street are bearing the brunt. A grocery store on the ground floor of the former X office announced it was shuttering last month after hemorrhaging $57,000 a day.

Chang said reopening Market Street could help the hotel attract more customers but did not offer more specifics. Group i has contracted with hotel company Highgate to run the hotel, and in mid-December, it renamed the lodging facility the Timbri Hotel.

Meanwhile, across the country in other large city markets, the Line hotel brand is facing turmoil. The Real Deal reported in February that the owners of the Line Hotel in Los Angeles, RECP Sydell Wilshire, had defaulted on its $100 million loan in the month prior. And in Washington, D.C., the Line Hotel was auctioned off and bought by its lender, ACore Capital.

It’s unclear if both hotels will retain the Line brand name. If the LA and D.C. locations end up rebranding, it could lead to just a single location — in Austin, Texas — still operating as a Line Hotel.