The hotel industry is booming after the recession in 2007-2008. Revenue per available room is forecasted to increase to 6.5% for 2015. As RevPar increases, hotel values will continue to rise. This is excellent news for the San Diego economy as people have money to spend and contribute to economic growth. As hotel values rise, so will values for other commercial properties within the area. “…San Diego County is expected to add 879 new hotel rooms in 2015, an additional 1,092 in 2016 and 721 in 2017.” As the demand for the hospitality business increases, the demand for office, retail, and industrial properties will also increase due to an increase in business productivity from the lodging industry.
Excerpts from the Article: “…despite all the attention placed on millennials, the baby boomers — the youngest of whom turned 50 last year — will have the biggest impact on the hotel industry in 2015.”
“Experts said increasing competition in the world of online travel booking sites, with companies such as Amazon getting into the game, promises to drive down commission fees paid by hotels for rooms booked through those venues, which should help boost hotel profitability.”
“Forum experts said the current supply-and-demand dynamics generally favor hoteliers for pricing and occupancy. But an expected rise in the local room supply could change the dynamics in coming years and make the climate less rosy for hotel operators and investors, said President Gary London of local consulting firm The London Group.”
San Diego Lodging Forecast, 2015
Occupancy: Will top 75 percent, for 1 percent growth above 2014
Average daily room rate: Should top $150, for growth of 5.4 percent
Revenue per available room (RevPar): Should grow 6.5 percent from 2014’s $106
Citation and Link: Hirsh, Lou. “The Good News Keeps Arriving for he Local Hotel Industry.” San Diego Business Journal. 27 Mar. 2015. 01 Apr. 2015 http://www.sdbj.com/news/2015/mar/27/good-news-keeps-arriving-local-hotel-industry/?page=1&
Picture Citation and Link: “San Diego Airport Hotels.” 2015. “Destination360.com.” 01 Apr. 2015. http://www.destination360.com/north-america/us/california/san-diego/san-diego-airport-hotels