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San Diego Sets State Record in ’07 for New Hotel Rooms

While sales of major hotels have come to a near standstill in the county, except for the historic La Valencia in La Jolla that went on the block several months ago, it’s just the opposite for lodging development.

According to a report by Atlas Hospitality Group, 1,043 new rooms opened in five hotels in San Diego during 2007 , more rooms than any other county in the state.

That’s a remarkable statistic, considering that San Diego saw nearly one-fifth of the state’s total of 5,668 new rooms open in a time the report’s author, Alan Reay, referred to as “a watershed year for new California hotels.”

“Not only did the number of new rooms (in California) jump more than 74 percent over 2006, but new rooms under construction increased a healthy 24 percent,” added Reay, president and chief executive officer of Atlas Hospitality, a Riverside-based brokerage.

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In 2006, a total of 3,265 hotel rooms opened in the state, the report showed.

The largest hotel to open in 2007 in San Diego was the 420-room Hard Rock. Altogether, the county’s total of 1,043 new hotel rooms to open last year marked a whopping 709 percent increase from the 129 rooms that opened here a year earlier.

Meanwhile, 10 hotels with a total of 2,751 rooms were under construction in San Diego in 2007, including the 1,190-room Hilton Bayfront on downtown’s waterfront, formerly known as the Hilton San Diego Convention Center Hotel, which is expected to open in November. At present, it is also the largest hotel under construction in the state.

Another first for San Diego: It had the highest total number of hotel rooms , 15,246 , in the pipeline in the state last year, a 14 percent jump from 2006.

Throughout Southern California there were 43,436 rooms in planning last year, up 6 percent from 2006.

In Northern California there were 24,738 rooms in planning in 2007, up from 18,491 rooms the year before.

Questions Raised

The number of projects on the drawing board for San Diego raises the question: How many more hotels does the county need considering a current inventory of 54,000 rooms?

As Reay and other industry experts point out, no more than 10 percent of proposed projects get built as a rule.

“But if you look at 2007, the number of rooms under construction in San Diego was 18 percent of those that were in planning in 2006, so San Diego has bucked the trend,” he added. “From the standpoint of the current economy though, I think San Diego will level off into the 10 percent to 12 percent range.”

He pointed out that his projected ratio for the upcoming year would exclude the new Hilton Bayfront and any new casino hotels, as those are typically reserved for gamblers, not leisure travelers.

Los Angeles County had nine new hotels with a total of 1,001 rooms open in 2007, while 4,352 rooms were under construction.

There were no hotel ribbon cuttings in Orange County, yet there were 1,983 rooms being built.

Riverside County saw four new inns with a total of 398 rooms open last year, and 655 rooms were under construction.

San Bernardino added 118 rooms in two hotels last year, and had 1,242 rooms under construction in 11 properties.


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