SAN JOSE – Hotel purchases have imploded in California and the Bay Area, another sign that post-coronavirus economic pain, including high interest rates, is still affecting the weak lodging sector across the state.
Investors paid a total of $447.5 million for Northern California hotels in the first six months of 2024, according to a new report from Atlas Hospitality Group, which tracks the state’s lodging market.
According to Atlas Hospitality, Northern California hotel revenue volume fell 36.9% compared to the same six-month period in 2023.
Purchase activity in Southern California totaled $739.4 million in the first six months of 2024, a 53.7% decline from the same six-month period last year, according to Atlas Hospitality estimates.
Hotel purchase volume in California totaled $1.19 billion in the first half of this year, a decrease of 48.5% compared to the first six months of the previous year.
According to Atlas Hospitality, three hotel deals were of interest in the first six months of the year in a brutal hotel investment market:
– Alameda County: A hotel, the 148-room La Quinta Inn in Oakland, was purchased for $12 million.
– Santa Clara County: One hotel was purchased, the 51-room Comfort Suites San Jose Airport, for a purchase price of $10.25 million.
– In San Francisco, the most expensive hotel deal was the purchase of the 136-room Da Vinci Hotel San Francisco for $16.5 million.
“The continued impact of higher interest rates as well as increases in operating costs, particularly labor and insurance costs, are depressing sales volumes and prices,” reported Atlas Hospitality Group.
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