San Francisco Hospitality Market Report

San Francisco hotels still feeling pandemic aftershocks. Despite a rebound in convention bookings, muted corporate travel and lingering reputational challenges are keeping occupancy below 2019 levels. Yet hoteliers are finding a lifeline with the newly approved Local Small Business Tax Cut Ordinance. Instead of the planned 30 percent hike, the ordinance lowers this year’s hotel tax rates by 12 percent — an important offset to still-elevated operating costs. A series of marquee events — including the 2025 NBA All-Star Game, followed by FIFA World Cup matches and a Super Bowl in 2026 — should also reignite tourism in the Bay Area, despite recent worsening international tensions. Because the construction pipeline remains almost dormant, existing hotels stand to capture incremental demand during these high-profile attractions. At the same time, city-backed initiatives — including additional mental health services, increased police presence and efforts to shelter displaced people — aim to improve conditions and restore visitor confidence. If successful, these measures could help reframe San Francisco’s image and encourage a return of leisure and business travel.