San Diego Hospitality Market Report
2023 Investment Forecast
San Diego Checks in as California’s Most In-Demand Lodging Market;
Lack of New Rooms Limits Competition
Foundations of year-round demand in place. San Diego-area occupancy is expected to improve for a third straight year, as a full slate of events and cruise ship calls — along with the metro’s favorable year-round weather — support a level of tourism nearly on par with pre-pandemic recordings. Hotels reliant on convention-generated demand will benefit from the San Diego Convention Center’s calendar, which includes nearly 50 events that will each draw at least 5,000 people. The list of upcoming happenings is headlined by Comic-Con and the Rock ‘n’ Roll Marathon Health & Fitness Expo. Further spotlighting San Diego on the national stage, the Farmers Insurance Open attracted an estimated 120,000 attendees this January, generating demand for rooms near Torrey Pines. Year-round, hotels proximate to the metro’s cruise ship terminal should record a steady inflow of out-of-town guests, as the number of monthly arrivals and departures matches pre-health crisis activity. Lodging options for those that board ships or attend the aforementioned events, however, will be similar to prior years, as San Diego adds less than 200 new hotel rooms during 2023. The combination of limited new supply and a potential uptick in tourism will allow overall average occupancy to exceed the 75 percent threshold for the first time in four years.