San Francisco Hospitality Market Report

Broad rise in hotel demand hinges on large event bookings. San Francisco’s hotel sector still has a lengthy road to recovery; however, the metro was the only major California market to note a gain in occupancy over the 12-month stretch ended in June. A recently encouraging rise in demand deserves credit. During the first half of this year, the Nob Hill-Wharf and Airport submarkets — the metro’s second- and third-largest areas by inventory — each recorded 120-basis-point occupancy gains when compared with the same period in 2023. Momentum in the Market Street submarket, however, trended in the opposite direction, with local occupancy receding by 60 basis points. The area, which composes 40 percent of the metro’s hotel stock, is being acutely impacted by the decline in convention bookings at Moscone Center. This will continue through 2024, as convention-generated stays are not expected to grow steadily until 2025 — a dynamic that will weigh on the metro’s overall recovery.