San Francisco’s hotels = more Eiffel 65 than Pharrell

Talk to a hotel owner in NYC or LA these days, and they may just burst out singing “Happy” by Pharrell Williams. Occupancy rates in the two cities are nearing pre-pandemic levels, and revenue per available room is exceeding what it was before the pandemic.

Not so in San Francisco, where the hotel market is suffering its worst period in at least 15 years and hoteliers are singing “I’m blue, da ba dee da ba di“ instead.

Revenue per available room in SF was nearly 23% lower in April compared with the same month in 2019. And, much like a fresh cup of orange juice, the city’s hotels are getting financially squeezed.

• The Huntington Hotel and Yotel San Francisco were recently sold after facing foreclosure.
• Last week, the Park Hotels & Resorts stopped making payments on loans tied to two properties (the Hilton San Francisco Union Square and Parc 55 San Francisco). It would be the city’s biggest hotel default to-date.

Other lodging properties could soon follow suit. An additional 20+ hotels in San Francisco are facing loans due in the next two years and could also be in danger of foreclosure, according to data company CoStar.

📸📉 Big picture: Tourism and convention travel, two key drivers of San Francisco’s hotel industry, are still lagging pre-pandemic levels, the WSJ reports. Overnight visits to the city were down 31% last year compared with 2019. And concerns over public safety are prompting many groups and associations to move their conventions to other markets like Las Vegas.