More hotels were built in California in the first six months of 2019 than ever before. San Diego County led the record-breaking pace, according to a report by Atlas Hospitality Group.
The county also had the biggest new hotel in the state to open in the first half of the year — the 302-room Sycuan Casino Resort in East County.
Since January, five hotels with a total of 860 rooms have opened in San Diego, with more on the way.
The closest other California metro area in the number of new hotels was Los Angeles County, in which four new hotels have opened since January with a total of 505 rooms.
“We’ve been tracking this for over 20 years, I’ve never seen this volume of new hotels under construction or the number of new hotels to open,” said Alex Reay, president of Atlas Hospitality.
“It far outpaces what we saw prior to the recession. We did have a lag during the recessionary times. We’re catching up,” Reay said. “We’re in a great economy from the hotel standpoint. Hotel owners are enjoying record profits and we’ve got the highest room rates.”
New hotels that have opened in San Diego County since January are the 181-room Hampton Inn & Suites Liberty Station, the 162-room The Guild in downtown, the 108-room TownePlace Suites Central in Kearny Mesa, the 107-room SpringHill Suites in Escondido and Sycuan Casino Resort.
The 246-room Carte Hotel in Little Italy, originally to open in July, is set to come on line in August.
19 Hotels in the Works
In all, Atlas Hospitality Group listed 19 hotels with 2,310 rooms under construction in San Diego County.
San Diego County stands out not only for the number of new hotels added, but because unlike Los Angeles, it did it without offering tax incentives.
“It goes to the strength of the San Diego market that the city doesn’t have to offer tax incentives,” Reay said. “I think it’s a sign that the market is very, very strong.”
Unlike some other cities in which hotel occupancy fluctuates seasonally, San Diego is a strong year-round market.
Reay said there’s no sign that the San Diego hotel market is close to being saturated, but he said the pace will likely slow.
“There’s no question that we can’t keep adding rooms at the rate we’ve been because the demand is finite,” Reay said.
The biggest hotel project still to come is the 1,390-room Manchester Pacific Gateway project, which includes two hotel towers and a boutique hotel.
Despite its size, Reay said the Manchester project should be easily absorbed, partly because it’s expected to draw new conventions to the city.
“It will probably create a lot of business for other hotels around there when big meetings are going on from people who don’t want to stay at that hotel,” Reay said.