By Roy Wright

 AUG 16, 2023

Sales activity in the hotel markets of the Bay Area and California has experienced a sharp decline in the first half of 2023, signaling the devastating impact of the coronavirus outbreak on the sector. The number of hotels sold during this period has dropped significantly, reminiscent of the recession in 2008 and 2009.

According to Atlas Hospitality Group, a firm that tracks the hotel industry in California, the number of hotels sold in the state decreased by 52.9% in the first half of 2023 compared to the same period in 2022. This decline is even worse than the 51% drop experienced during the last recession in 2009.

Both Northern and Southern California have been severely affected by the decline in hotel sales. In Northern California, there was a 44.6% decrease in individual hotel sales, with only 62 hotels sold in the first half of 2023 compared to 112 in the previous year. Southern California, on the other hand, experienced a 58.9% nosedive in hotel sales, with only 62 hotels sold compared to 151 in the same period last year.

Amidst this downturn, notable hotel deals have still taken place. In Alameda County, the 276-room Claremont Hotel in the Oakland-Berkeley area was sold for $163.3 million, making it the biggest hotel deal in the county for the first half of 2023. In Santa Clara County, the sale of the 89-room Arena Hotel in downtown San Jose for $22.9 million marked the largest hotel deal in the area during the first six months of the year.

The hotel industry in the Bay Area and California continues to face significant challenges as the effects of the pandemic persist. Recovery may take time, but industry experts remain hopeful for a rebound in the future.