San Diego Hospitality Market Report

Demand improves across most submarkets. San Diego International Airport logged a record year for passenger volume in 2025; however, the opening of the largest hotel on the West Coast negatively impacted occupancy. While the 1,600-room Gaylord Pacific Resort & Convention Center may again weigh on overall occupancy in 2026, near-term improvement is likely in downtown San Diego, areas near the airport, and in Carlsbad-Oceanside. In the latter submarket, the opening of LEGO Galaxy in March — a new space-themed land at LEGOLAND California — could increase annual attendance beyond the historical average of 2 million to 2.5 million. Elsewhere, the 2026-2027 cruise season, which begins in September, could see an uptick in passenger volume following expanded service announcements from Royal Caribbean and Disney. This, along with the full completion of the airport’s new Terminal 1 in 2028, should aid demand in the CBD and other central locations in the coming years.