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Market Report

San Francisco Hospitality Market Report

Midyear 2023

San Francisco at a Crossroads as Pillars of Local
Hotel Demand Enter Various Stages of Transition

Tourism is a bright spot. The San Francisco metro had the highest hotel occupancy among major West Coast markets during the 12-month period ending in June 2019. Fast forward to the same interval ending in June 2023, and only Portland had a lower rate. Over the near term, local room demand and revenue metrics are expected to remain well below their pre-pandemic marks in San Francisco due to the sector’s reliance on tech-driven business travel and conventions, which have yet to return in full force. Still, the metro should record some improvements over the near term, albeit moderate. Across the international and domestic segments, more than 23 million visitors are expected to visit the area this year, a 5 percent increase over 2022. This rise represents a boon for hotels in San Francisco proper and those proximate to the airport, with properties in downtown also benefiting from a lack of room additions this year. 
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