After several years of subdued activity, California’s hotel development market is showing renewed momentum in 2025, highlighted by a surge in new openings and a major milestone in hospitality construction. According to a mid-year report from Atlas Hospitality Group, 36 hotels opened in the first half of 2025, up 64 percent from the same period in 2024, with total room count rising by 135 percent—from 2,289 to 5,369 rooms. The standout contributor to this growth was the 1,600-room Gaylord Pacific Resort in Chula Vista, which alone accounted for more than half of the increase in total rooms.

“We have seen 64 percent more hotels opened up as compared to last year, with 135 percent more rooms,” said Alan X. Reay, president of Newport Beach-based Atlas Hospitality Group. “The 1,600-room Gaylord Pacific Resort in Chula Vista is the largest hotel to open in 2025, and it is also the largest hotel to open in California in the last thirty-three years.” 

Despite this resurgence in openings, future supply appears to be moderating. The number of hotels currently under construction fell by 19.5 percent to 99 projects, while total rooms dropped 21 percent from 15,542 in 2024 to 12,213 in 2025. Analysts note that rising construction costs and tighter lending conditions have contributed to a more selective and cautious pipeline moving forward. Los Angeles County led Southern California in terms of construction volume, with five hotel openings and 20 properties (2,435 rooms) currently under construction. The 194-room AC Hotel Pasadena was the largest to open, while the 300-room Kali Hotel in Inglewood is the largest project underway. With 195 hotels and over 27,000 rooms in planning, the county remains the most active development hub in the state, though its pipeline has slightly contracted year-over-year.

San Diego County, boosted by the high-profile Gaylord opening, added three hotels with a total of 1,699 rooms. The 200-room Jamul Casino Hotel leads the 10 active construction projects totaling 1,106 rooms. Long-term, San Diego remains a core focus for hospitality investment with 91 projects and more than 15,000 rooms in the planning stages. On the other hand, Orange County saw only one new hotel open — the 91-room La Quinta Inn & Suites in La Habra—and currently has just five rooms under construction, reflecting a pause in new builds. However, 67 hotels with over 10,600 rooms are in the planning pipeline, signaling latent developer interest in the region. Meanwhile, the Inland Empire experienced notable activity. Riverside County added three new hotels, while San Bernardino opened two, including the 125-room Courtyard Loma Linda. Riverside leads the region with nine hotels and 1,243 rooms under construction, anchored by the 250-room Hotel Indigo Coachella. San Bernardino follows closely, with 11 hotels and 1,141 rooms under construction. Combined, both counties have nearly 18,000 rooms in planning.

In Santa Clara County, three new hotels opened, with the 254-room Treehouse Hotel Sunnyvale being the largest debut in Northern California. The county has one hotel under construction—the Hotel Mohi Morgan Hill with 76 rooms — and 70 hotels with more than 10,700 rooms in planning. Alameda County recorded two hotel openings, the largest being the 128-room Homewood Suites in Fremont. Construction activity is minimal with only two projects totaling 234 rooms underway, but long-term interest remains strong with 38 hotels in planning. Sacramento County followed a similar pattern with two new hotels opened, led by the 177-room Residence Inn Sacramento Woodlake. Two hotels totaling 281 rooms are under construction, with 44 more in the pipeline, accounting for nearly 6,000 future rooms. In contrast, San Francisco County saw no new hotel openings in 2025. Only one project — the 169-room Waldorf Astoria — is under construction, while 41 hotels with 4,729 rooms remain in planning, reflecting persistent caution in the urban core.

The dramatic rise in hotel openings through mid-2025, after a cumulative 66 percent decline over the previous three years, signals a market rebound. However, the dip in under-construction projects highlights a more selective environment shaped by financing constraints and rising costs. Based on the report, developers are increasingly prioritizing well-positioned, large-scale projects with strong demand fundamentals, as evidenced by the focus on marquee properties like the Gaylord Pacific and Treehouse Hotel. Meanwhile, lenders are applying heightened scrutiny, leading to longer timelines and fewer speculative ventures. As construction pipelines tighten, planning activity across counties suggests continued long-term optimism. The focus is likely to shift toward high-yield, high-demand locations with favorable tourism and business fundamentals.