Crowded beaches, expensive hotel rooms and long lines at airports confirm the findings of a new report that shows San Diego’s leisure travel sector has surpassed pre-COVID levels, surpassing rival California cities Los Angeles and San Francisco.
Hotel revenue generated by vacationers to San Diego (nearly $1.9 billion) is expected to be nearly 20% higher than 2019 figures by the end of the year, even as a pandemic crippled the travel economy for much of 2020 . That’s according to a new analysis released this week by the American Hotel and Lodging Association and Kalibri Labs, a company that forecasts hotel revenue performance. By contrast, the top 50 U.S. hotel markets saw an average 14 percent increase in leisure travel revenue, the report found.
Among the 50 cities, San Diego ranks 14th for projected room revenue growth since 2019. It is followed by Anaheim at No. 11, with hotel revenues expected to grow by more than 23% for overnight vacation stays. However, California’s two other top travel destinations — Los Angeles and San Francisco — are far behind.
Los Angeles ranked 32nd, followed by San Francisco, which has struggled to regain its once-strong tourism status. With a drop of nearly 19% since 2019, it is one of only eight cities in the top 50 that is expected to see a decline in hotel revenue related to vacation travel.
With the rapidly changing coronavirus restrictions and the gradual reopening of the tourism economy, San Diego has some advantages over Los Angeles and San Francisco, explained Peter Sheeran, spokesman for the California Hotel and Lodging Association. On the one hand, neither Los Angeles nor the Bay Area are reopening anytime soon, he said. In addition, both regions are more reliant on international tourists, especially from Asia, which is one of the slowest regions in the world to resume travel, Hillan said.
“The pandemic has revealed some of the long-standing problems (in San Francisco) that are already there, particularly with the convention market and business travel, such as street behavior and homelessness driving business travelers and convention workers away,” Sheeran said.
Just a year before COVID hit, one of San Francisco’s largest annual tech conferences — Oracle’s OpenWorld — decided to move to Las Vegas, citing high hotel prices and “poor street conditions.”
“That’s not to say other cities don’t have this problem, but San Francisco is suffering more nationally than San Diego,” Sheeran said.
Unlike the leisure market, business travel has rebounded much more slowly, as evidenced by the Kalibri report, which predicts that by the end of 2022, only 40% of the nation’s top markets will surpass 2019 levels. The San Diego news, however, is, well, good. The analysis concluded that hotel revenue related to business travel will be 8.5% higher than the 2019 record.
While business travel in San Diego isn’t expected to reach pre-pandemic levels until 2023 or possibly 2024, Kalibri’s analysis includes meeting and conference travel in the business category, which has been rebounding strongly in San Diego.
Daniel Kuperschmid, general manager of the Manchester Grand Hyatt, San Diego’s largest conference hotel, said his conference-related business has outpaced the hotel’s performance in 2019. This, coupled with particularly strong income from leisure travelers, is helping to make up for a weaker rebound in business travel.
“San Diego is definitely outperforming other cities on the West Coast,” he said. “Business travel is starting to pick up, but not yet at 2019 levels. However, our meeting business is very strong, already above 2019 levels. As a hotel, since June this year, we have surpassed 2019 and next year It’s going to be a record year for hotels.”
Kerri Kapich, chief operating officer of San Diego Tourism, noted that San Diego has an advantage over cities like Los Angeles and San Francisco because it has never been as heavily reliant on international travel as those two metro areas.
She added: “If we look at the January-September period so far this calendar year, the average daily room rate for group (and meeting) businesses was $35 per night higher than it was in 2019, so everyone is seeing price increases. , which is no doubt part of the revenue growth.
“When I look at the amount of revenue generated in this report, it’s great. It’s been a long process, so the market is doing pretty well, so I feel good, but there’s more work to do.”