has faced an exodus of wealthy residents and big retailers, now large hoteliers are following suit.
The hotel market is suffering its worst period in at least 15 years, according toSan Francisco’s hotel occupancy and room rates have not recovered from the , the paper reported citing figures from hotel-data firm STR. Revenue per available room was almost 23 percent lower this past April than the same month in 2019. Meanwhile, Los Angeles and New York are filling as many rooms this year as they were four years ago.
Just last week, an investor in the city’s largest hotel—Hilton San Francisco Union Square—announced that it would stop paying its loans. Parkand Resorts CEO Thomas Baltimore, Jr. said that San Francisco’s “path to recovery remains clouded and elongated by major challenges,” The company walked away from its $725 million loan and surrendered the hotels to its lender.
More hotels might follow suit and drop the city. Facing an impending foreclosure, the owner of Huntington Hotel sold its property. Yotel San Francisco was also sold in a foreclosure auction, and Club Quarters San Francisco—which has been in default on its loan since 2020—could also face foreclosure, WSJ reported citing data company Trepp. Additionally, over 20 other hotels in the city are facing loans due in the next two years, according to data company CoStar.
The hotel industry slump has been attributed to factors like lower convention bookings, quality of life issues, and tech employees being able to work from home. “The recovery will be slow,” Jan Freitag, national director for hospitality analytics at CoStar, told WSJ. “I think if you are a CEO or the meeting planner who recommends to the CEO, it’s very easy to say, ‘Let’s just wait on San Francisco for another year.’”
But hotels aren’t the only signs of the city’s struggle. Nineteen retailers have left the city’s Union Square area since 2020,reported. A Bay Area exodus of the region’s has also taken place. And on Monday, reported that the city’s biggest mall has surrendered the shopping center to its lender.