Orange County Hospitality Market Report

Segmented demand coincides with supply constraints. In a shift from 2023, Orange County’s limited-service sector led demand growth across property types in 2024. Momentum is poised to carry into 2025, as cost-conscious leisure travel, along with potential improvements in group travel and extended stays, will continue to support strength in this segment. This trend is further reflected in relatively strong projections for areas like Fullerton, Santa Ana and Costa Mesa, which offer comparatively affordable nightly rates and high levels of connectivity to the metro’s attractions. That said, full-service demand should pick back up, particularly in the Newport Beach-Dana Point submarket. As leisure spending among high-income travelers returns, occupany here is expected to record a 200-basis-point rise this year. Meanwhile, crimped supply growth will persist, keeping room inventory relatively unchanged since 2021. This constrained pipeline has supported occupancy, which is expected to record a substantial increase this year, reaching its highest level since 2019 and potentially curtailing headwinds tied to falling consumer confidence.