San Diego Business Journal
11/18/19

Is San Diego Tourism Hitting Peak Hotel?
By Tom York

https://www.sdbj.com/news/2019/nov/18/san-diego-tourism-hitting-peak-hotel/

Ask the local hotel industry experts, and they’re happy to tell you.

San Diego’s hospitality sector has enjoyed an unprecedented period of prosperity over the past decade.

They can boast about the high occupancy rates and the high price they can charge for a room.

However, those same experts are starting to worry when good news will turn sour.

“The hotel industry has been through nine years of record growth,” said Joe Terzi, CEO of the San Diego Tourism Authority, which is spending close to $30 million each year on various marketing activities to lure travelers to the region.

84% Occupancy Rates In Peak Periods
Occupancy rates for Central San Diego, for example, have hit record or near record levels, running as high as 84 percent in peak periods.

“But we’re now where things are somewhat concerning because of the national political situation and several other issues, such as the strong dollar,” said Joe Terzi, president and CEO of San Diego Tourism Authority. “We think the next several years are going to be challenging.”

He said cracks already began appearing in the first quarter of 2019 when travel spending was down 0.04 percent compared with the first quarter a year ago.

Alan Reay, president of the Irvine-based hotel broker Atlas Hospitality Group, said the hoteliers countywide have enjoyed average daily room rates as high as $160 a night, touching the prices reached just before the Great Recession in 2008-2009.

He said the hotel business here has been so strong that developers want to add even more rooms

Under Construction

“We’ve got … a record number of rooms under construction,” he said. “It’s something we’ve never seen before, a 10-year bull run in the hotel industry.”

By year’s end 2019, as many as 12 new hotels representing more than 1,800 rooms will be available in the county, according to the Tourism Authority.

And an additional 24 hotels could come online in 2020 and 2021, including two potential 550-room hotels being considered on the drawing board for Doug Manchester’s downtown Pacific Gateway Complex at the foot of Broadway…