The San Francisco's hotel market shows signs of a new beginning after bottoming out in 2024, according to a new JLL study.
The study shows that San Francisco’s hotel performance continues to rebound, driven by an improved convention center, a resurgence of international demand and big upcoming events. RevPAR bottomed out in 2024 and shows signs of robust recovery while convention center bookings are surging, with 2025 room night pace up 50 percent compared to 2024.
RevPAR bottomed out in 2024 with strengthening demand drivers signaling a robust recovery ahead. San Francisco hotel performance continues to rebound, driven by an improved convention calendar, resurgence of international demand, and upcoming marquee events. A rise in return to office mandates coupled with SF’s resilient venture capital funding and burgeoning AI sector should fuel hotel demand particularly from increased conferences, related industry events, and transient business travel.
Timely opportunity to capitalize on scarce new supply in a rebounding market. SF hotel supply growth has been on a downward trend since 2019, driven by ongoing supply chain disruptions, high construction costs, and challenges obtaining development financing. Look for supply to grow an average of only 0.8 percent over the next four years, 77 bps less than its long-term average since 2000.
Hotel investment is poised for a rebound from historic low. With private equity poised to return amid a political leadership changes and a significant pricing reset, expect renewed interest in full-service hotels. With pricing 45 percent below its long-term average, investors have a historic opportunity to acquire quality hotels. This presents a rare opportunity for investors to acquire hotels at a discount. Moreover, SF offers one of the nation’s most compelling discounts to replacement cost. Investors can acquire full-service assets at a 78 percent discount and select-service assets at a 31 percent discount to replacement cost, making it an attractive market for both hotel segments.
Foreign buyers to revisit SF amid renewed opportunities. Foreign investors are returning to San Francisco's hotel market, eyeing fresh opportunities. European, Singaporean, and South Korean investors, along with Middle Eastern Sovereign Wealth Funds, are gearing up to acquire irreplaceable, luxury assets. These international players, who have historically shaped the city's hotel landscape, are poised to make significant moves. Market tailwinds are fueling this renewed interest, signaling a notable shift in post-pandemic dynamics.
JLL said recent political changes are creating a more business-friendly climate and various economic indicators are fueling significant tailwinds for the immediate and long-term future. San Francisco raised nearly a fifth of U.S. venture capital funding in 2024 and has major upcoming events, including the 2025 Microsoft Ignite Convention, 2026 FIFA World Cup matches and the 2026 Super Bowl.