- San Diego County hotel demand has been trending below 2019 and 2022 levels since early March, with weekly demand at about 10-15K fewer room nights sold compared to the same time last year. Average rates have also normalized back to 2022 levels in recent weeks.
- County hotels sold a total of 324,392 RNs last week, about 11,000 fewer RNs sold than the same week in 2022 and 13,000 fewer than in 2019. Group demand among upscale+ properties came in weaker than the same time last year, by about 8,000 RNs, suggesting leisure demand was somewhat stable week over week. Nonetheless, recent weakening has been mostly attributable to slightly weaker domestic leisure demand, prompting a slight reduction to our 2023 room night demand forecasts.
- County occupancy averaged 72.1% peaking on Saturday at 90.3%. San Diego remains middle of the pack among top 25 markets, ranking 10th last week and 4th in the western competitive set, below Seattle at 74.6%, San Francisco at 74.0% and Los Angeles at 73.9%. The top three markets for the week were New York (89.5%), Washington DC (83.2%) and Boston (82.2%).
- Within the City of San Diego, UTC properties had the highest average occupancy at 79.7%, followed by I-15 Corridor at 78.3% and Pt. Loma/Airport at 75.8%.
- SDCC had one group moving into the center towards the end of the week, but the majority of the blocked room nights didn’t fill up until 5/20. As a result, Group demand among upscale+ properties totaled 48,776 with average occupancy of 25.6%, peaking on Tuesday at 34.6%, and an average rate of $266. Last week’s Group demand was about 8,000 less than the same week in 2022 and 13,000 less than 2019.
- County ADR came to $196 for the week, slightly lower than other southern California destinations with Los Angeles at $202 and Orange County at $201, while San Francisco jumped ahead to average $218 for the week. Research from Expedia shows an uptick in demand coming through their channels in late April and so far in May, potentially signaling that consumers are becoming more price sensitive as they seek out promotions and loyalty rewards through OTA platforms. This dynamic could feed into hotel rate strategies through the summer and may spur a slight reduction in rates, relative to 2022, to maintain room demand.
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