San Diego Visitation and Hotel Performance
- Visitation to San Diego in 2019 has been revised down from the December 2018 forecast, from 36.5 million to current projections totaling 36.2 million. Total visitation is expected to grow 1.3 percent in 2019, a downward revision from the previous forecast of 2.0 percent.
- Visitor expenditures are expected to grow an average of 4.1 percent each remaining quarter of 2019, for total annual expenditure growth of 3.4 percent for the year. Overnight visitors are projected to expand expenditure by 3.5 percent in 2019, while day visitors will grow spending by 2.5 percent.
- Hotel room demand growth has been revised down from the December 2018 forecast of 2.0 percent to 0.8 percent in the present forecast. Room supply growth remains unchanged, at 2.2 percent growth for 2019.
- With supply growth outpacing demand growth in San Diego, and a slowing economy beginning to emerge across the country, occupancy is expected to contract in the coming years, by -1.7 percent in 2019, -0.3 percent in 2020, and -0.2 percent in 2021. Despite this cooling trend, San Diego hotel occupancy continues to far outperform the overall US hotel sector, averaging 77.4 percent compared to the US average of 66.2 percent.
- Average daily rate (ADR) growth is expected to increase 2.0 percent in 2019, a slight downgrade from the December 2018 forecast of 2.5 percent. Revenue per available room (RevPAR) growth has also been downgraded from the previous forecast of 2.5 percent and is now projected to grow 0.3 percent in 2019.
United States & Global Economies
- The US and global economies have both settled into gradual cooling paths in 2019, following peak cycle growth in 2018. Domestic GDP is expected to grow 2.4 percent this year, while global GDP growth is forecast at 2.7 percent.
- Fiscal stimulus from the Tax Cuts and Jobs Act of 2017 and the Bipartisan Budget Act of 2018 has run the bulk of its course and is expected to dissipate in 2019.
- The approaching fiscal policy drag, alongside new and enduring trade tensions, will limit business investment growth this year, and will drive it toward 2.0 percent by 2020.
- Foreign travelers remain wary of uncertainty surrounding the Trump Administration and dollar strength continues to discourage travel.
For complete overview including U.S. and international outlooks, please go to www.sandiego.org/research to download the full report.