Tom York on Business: Gov. Newsom’s Project Homekey Kept California Hotels Afloat in 2020

https://timesofsandiego.com/business/2021/02/22/tom-york-on-business-gov-newsoms-project-homekey-kept-california-hotels-afloat-in-2020/

Tom York

Hotel involved in Project Homekey
A San Diego hotel involved in Project Homekey. Image from San Diego Housing Commission video

Orange County hospitality expert Alan Reay recently released his annual 2020-year-end survey of hotel sales transactions in the state. The report is always of interest because of the importance of hotel industry to the state and San Diego economy.

Some highlights of the report:

  • COVID-19 had a “devastating impact” on the number of sales in the United States, except in California.
  • Indeed, California is the only state to record an increase in hotel sales. The jump was 52% statewide.
  • That’s due to Project Homekey, Gov. Gavin Newsom’s sweeping plan to protect the homeless from the COVID-10 pandemic. The program had a huge impact on statewide sales for the year.

Under the program, the state purchased $500 million worth of hotels to help house the homeless during the COVID-19 pandemic.  Without those transactions–many purchases coming late in the year—statewide sales would have been off 30%, with dollar volume off 60%.

San Diego hotel sales overall fared OK in 2020, but dollar volume was way down. During the year, 22 hotels were sold, up from the 20 in 2019.  Those 22 sales totaled $300 million for 2020, off 61% in 2019, when sales totaled $767 million. The largest single transaction was the $63 million sale of the 211-room Hotel Palomar.

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