San Diego continues to ring in the New Year on solid footing. Room night demand has consistently surpassed levels observed during the initial weeks of 2023 and 2024. A big question over the past few weeks has been whether displaced residents in LA have sought refuge in San Diego, but there is no substantial evidence indicating a significant influx of evacuees seeking refuge in San Diego hotels. Notably, many hotels in the region have offered discounted rates to those affected by the wildfires, so any large influx of LA residents would typically result in a surge in demand accompanied by a decrease in ADR as those cut rates are offered to those visitors, something that has not been seen in our market so far this January. Additionally, the absence of adverse weather conditions, which impacted demand in previous years, may also contribute to the improved performance observed in 2025.
Weekly Highlights:
- Room Nights Sold: Hotels across the county sold 305,654 room nights, approximately 17,000 more than in 2024 and 9,000 more than in 2023.
- Occupancy: Average occupancy reached 67.2% last week, marking a 5.1% increase over the same week in 2024. This uptick aligns with a 7.6% year-over-year increase in total Group occupancy (across all property types) and a 4.7% rise in total Transient occupancy.
- Top Submarkets: UTC led with 75.8% occupancy, followed by Mission Valley at 70.2% and Pt. Loma Airport at 69.2%. Notably, both the I-15 Corridor and UTC peaked above 80% occupancy midweek, suggesting that hotel meetings contributed to the overall market strength.
- Market Rankings: While San Diego’s performance improved compared to previous years, it ranked 8th among the top 25 markets and third in the competitive set, trailing Phoenix (76.6%) and San Francisco (71.2%). Both cities hosted events last week:
- San Francisco: Hosted the Society for Technology in Anesthesia, contributing to an ADR surge to $626.
- Phoenix: Hosted the Integrated Behavioral Health in Primary Care conference.
- Top 3 Markets: Tampa (86.9%), Oahu (78.8%), and Miami (78.5%) led in occupancy rates.
- Average Daily Rate (ADR): The increased demand propelled ADR to $187, an $8 week-over-week rise and approximately $10 higher than in 2023 and 2024.
Convention Impact:
The San Diego Convention Center hosted a smaller primary event, Cabi, last week, contributing approximately 4,000 room nights. Additionally, non-SDCC events added about 8,700 room nights, likely helping to support the strength observed in the UTC and I-15 Corridor submarkets.
Group demand at upscale+ properties totaled 56,932 room nights with occupancy of 29.8% and $280 ADR. Room night production and occupancy more or less mirrored 2023, but ADR is $11 higher than 2023 or 2024.
Additional Context:
- Los Angeles Wildfires: Since January 7, 2025, a series of destructive wildfires, including the Palisades, Eaton, and Hughes fires, have affected the Los Angeles metropolitan area, leading to widespread evacuations and property damage.
Despite concerns, there is no substantial evidence indicating a significant influx of evacuees seeking refuge in San Diego hotels.
Weather Conditions: Unlike previous years marked by adverse weather, San Diego experienced favorable conditions during the week of January 13-19, 2025, with temperatures ranging slightly above average and ample sunshine, which likely supported increased travel and hotel occupancy compared with the previous two years.
View the complete hotel performance report here*.
*PDF Note: ‘Week Day Analysis’ and ‘Weekly Trends’ tables and charts reflect Group and Transient demand at upscale+ properties. All other pages reflect total market.
Leave a Reply