The North Bay is not immune, but also is home to one growing segment of the industry unaffected by financing costs.

CHERYL SARFATY | THE NORTH BAY BUSINESS JOURNAL

January 20, 2025, 7:32PM | Updated 47 minutes ago

90 local hotel projects on the drawing board

Napa County (35 projects): 22 in Napa; seven in St. Helena; three in American Canyon; one in Calistoga; one in Pope Valley; one in Yountville

Sonoma County (30): eight in Santa Rosa; six in Healdsburg; three in Petaluma; three in Rohnert Park; three in Sonoma; two in Sebastopol; one in Geyserville; one in Guerneville; one in Kenwood; one in Sea Ranch; one in Windsor

Solano County (nine): three in Vacaville; two in Fairfield; two in Vallejo; one in Dixon; one on Mare Island

Lake County (nine): five in Lakeport; three in Clearlake; one in Middletown

Marin County (four): two in Novato; one in Corte Madera; one in Mill Valley

Mendocino County (three): two in Fort Bragg; one in Ukiah

Atlas Hospitality Group California Hotel Development Survey, 2024 year-end report

Hotel development projects throughout California saw little forward progress in 2024, according to a real estate brokerage that tracks the industry.

Last year, 35 new hotels opened in the state, a 34% decline from 2023, according to Atlas Hospitality Group’s California Hotel Development Survey 2024 Year-End. The firm also releases a midyear survey.

The reasons for the decline add up to a continuation of obstacles.

Economic uncertainties have had lenders skittish for going on three years, as the Business Journal first reported in Atlas Hospitality’s July 2022 midyear survey.

Alan X. Reay, president of Newport Beach-based Atlas Hospitality, addressed those uncertainties on Wednesday.

“The increased cost in financing, combined with the rapid increase in construction costs, have made it very difficult for new hotel development,” Reay said. “We see this trend continuing for the near future, 1-to-3 years at a minimum.”

Of the 35 new hotels that came online last year, Los Angeles County had the most, with five new hotels. Riverside County followed with four, according to Atlas’ 2024 year-end report.

Los Angeles County also closed the year with the most hotel projects under construction in the state, at 23, according to Atlas.

The anomaly

The largest hotel to open last year in California was hardly ordinary.

It was the 197-room Chicken Ranch Casino Hotel in Jamestown in Tuolumne County.

In fact, Reay noted, casinos with hotels are a thriving segment of the industry.

“They are on tribal land, so they have (fewer) regulations to deal with, and the tribes require little to no construction financing,” Reay said. “They also are driving almost 100% of their business from the casino, so they do not need a major brand, which saves them on franchise fees.”

In the North Bay, Graton Resort & Casino in Rohnert Park, owned and operated by the Federated Indians of Graton Rancheria, opened a 200-room hotel in 2018, five years after the casino opened. Graton is currently in the process of adding a 400-room hotel wing.

River Rock Casino in Geyserville, owned by the Dry Creek Rancheria of Pomo Indians, in June proposed including a 100-room hotel as part of the casino’s planned expansion. That project awaits the green light.

Last week, Koi Nation got the go-ahead from the Biden administration to build a casino near Windsor, proposed to include a 400-room hotel.

Local openings and construction

Within the six-county North Bay region, two hotels opened last year: the 22-room Evergreen Boutique Motel Corte Madera in Marin County; and the 99-room Wyndham Garden Inn, located in Mendocino County’s Redwood Valley.

Atlas is expected to release its 2024 year-end hotel sales survey next month, Reay said.

Cheryl Sarfaty covers tourism, hospitality, health care, aviation and employment. Reach her at cheryl.sarfaty@busjrnl.com or 707-521-4259.