California Sets New Record with Hotel Openings in 2019
By Joseph Pimentel
California last year set a state record for the number of hotel openings in a single year, a new report says.
Atlas Hospitality Group, an Orange County-based brokerage firm specializing in the hotel industry, reported that the Golden State saw 92 hotels open, totaling 11,795 rooms in 2019. The last time the state had a similar boom was in 2017, when 66 hotels opened, totaling 10,794 rooms, according to Atlas Hospitality President Alan Reay.
“California has one of the strongest economies, not only in the U.S. but the world,” Reay said in an interview with Bisnow. “Investors, both domestic and international, all see the state as a great long-term investment. Corporate travel coupled with the huge tourism business gives California a very diverse business base.”
The Southern California region, which includes Los Angeles, Orange and San Diego counties and the Inland Empire led the way with 46 hotels opening totaling 4,534 rooms.
In 2019, San Diego saw 10 hotels open with 1,668 rooms, a 36% increase in room numbers year-over-year. Los Angeles County had nine new hotels with 1,167 total rooms open in 2019, a 24% increase in room count from the previous year, according to the report. In Orange County, three hotels totaling 632 rooms opened, a 42% increase in rooms from 2019. With 352 rooms, the Cambria Hotel Anaheim Resort Area was the largest California hotel to open last year.
The Inland Empire, which includes Riverside and San Bernardino County, had 12 hotels totaling 1,306 rooms open. Riverside saw a 139% room count increase from last year’s three hotels, totaling 447 rooms that opened, the report states.
In Northern California, San Francisco, Santa Clara and Sacramento counties saw 18 hotels open totaling 2,892 rooms. The 351-room Grand Hyatt at San Francisco Airport was the largest hotel that opened in Northern California last year, according to the report.
All indications are that the hotel boom in the state is not over, Reay said.
California has 212 hotels with 28,102 rooms currently under construction and nearly 1,200 hotels, totaling more than 159,700 rooms, are in various stages of planning.
Los Angeles County has the most rooms under construction, with 7,030. Orange County is next, at 3,166, according to the report.
Reay said he is not surprised by the large number of hotel openings.
“We are now finally catching up with the lack of supply for a number of years after the Great Recession,” Reay said, adding that from 2010 to 2014 there were only 100 hotels, totaling 13,000 rooms, that opened.
He said in Southern California a combination of business growth, tourism, nice weather, international appeal, and the rise of convention and trade show business is driving up the hotel demand.
Though some expect some sort of economic downturn to hit the economy, Reay said he believes that California will continue to prosper.
“Always hard to predict a downturn, but all indicators we see is that California is still enjoying good growth, so we see it as strong for at least the next 12 to 24 months,” Reay said.