San Diego Hospitality Market Report

Bookings lift across hotel classes prior to peak tourism season. Outside of Las Vegas and Florida locales, San Diego recorded the highest occupancy among major U.S. markets over the past 12 months ended in May. During this span, the percentage of filled economy, midscale, upper midscale and upscale rooms each exceeded the 70 percent threshold, with upper upscale establishments registering a more than 2,900-basis-point rise in occupancy. Widespread demand gains enabled the average daily rate to increase by more than 20 percent across all classes of hotels, boosting operators’ RevPAR. An additional reason for optimism, hotel demand in May of this year was on par with the same period in 2019. This circumstance suggests the sector may fully recover in the near term, a projection further bolstered by upward trending passenger totals at San Diego International Airport and overall visitor volume.