What's Happening?
San Francisco's hotel market is experiencing a significant rebound, marked by an 8.9% increase in RevPAR as of August 2025. This recovery is driven by a robust convention calendar, major employers enforcing return-to-office mandates, and a modest rise
in tourism. The San Francisco Travel Association projects that Moscone Center will generate over 650,000 room nights in 2025, surpassing 2023 levels but still below the peak performance of 2019. Notable companies like Salesforce and Gap, Inc. have implemented full return-to-office policies, contributing to the city's economic revitalization. Despite the improved market performance, hotel transactions have been limited, with only smaller, limited-service hotels being sold. However, significant investments are underway, such as the renovation of the Huntington Hotel by Flynn Holdings and Highgate Hotels, aiming to position it as a market leader in ADR.
Why It's Important?
The rebound in San Francisco's hotel market is crucial for the city's economic recovery post-pandemic. The increase in RevPAR and return-to-office mandates by major employers signal a positive trend for local businesses and the hospitality industry. Investors are presented with opportunities to enter the market at favorable pricing levels, given the current low transaction activity. The renovation of historic properties like the Huntington Hotel reflects a commitment to preserving San Francisco's architectural heritage while enhancing its appeal to tourists and business travelers. This resurgence in the hotel sector is expected to bolster the city's reputation as a top lodging market in the U.S., attracting further investment and boosting local employment.
What's Next?
The San Francisco hotel market is poised for continued growth, with several pending transactions for major properties like The Clancy, Hilton San Francisco Union Square, and Parc 55. As these deals finalize, they could stimulate further investment and development in the area. The renovated Huntington Hotel is set to open in early 2026, potentially setting a new standard for luxury accommodations in the city. The ongoing return-to-office policies may further increase demand for hotel rooms, supporting the market's upward trajectory. Stakeholders, including investors and local businesses, will likely monitor these developments closely to capitalize on emerging opportunities.
Beyond the Headlines
The revitalization of San Francisco's hotel market may have broader implications for urban development and tourism strategies. As the city recovers from the pandemic, there could be increased focus on sustainable tourism practices and infrastructure improvements to support long-term growth. The preservation of historic hotels like the Huntington Hotel highlights the cultural significance of maintaining architectural heritage while adapting to modern demands. This balance between tradition and innovation may influence future urban planning and investment decisions in San Francisco and similar metropolitan areas.
