Bay Watch – APEC Hospitality Impact

Bay Watch: A Weekly Look into the Bay Area Economy

November 30th, 2023

All eyes were on San Francisco this month as the city hosted the 32nd annual Asia-Pacific Economic Cooperation (APEC) conference, the largest gathering of world leaders in the city since the 1945 UN Conference on International Organization. With leaders, dignitaries, and delegates converging for critical discussions on international trade and cooperation, the city’s leisure and hospitality industry experienced an unprecedented surge in demand, prompting a vital boost in revenue streams for hotels, restaurants, and bars across the city.

How did APEC impact the hotel economy?

During APEC week (November 12 to November 18, 2023), occupancy rates across San Francisco’s hotels increased by 8 percentage points when compared to the same week in 2022. RevPAR, or revenue per room, is the most comprehensive metric for measuring the health of the hotel economy. It incorporates both the average daily rate and occupancy rate, and illustrates the revenue generated per room regardless of if rooms are occupied. RevPAR in San Francisco increased by $52 year-over-year, for a 37% increase. Among the country’s largest hotel markets, this increase was bested only by Las Vegas.

With Park Hotels & Resorts, one of the nation's largest hotel chains, announcing earlier this year that they plan to pull out of two hotels in downtown San Francisco, as well as data from the American Hotel & Lodging Association (AHLA) showing that SF business travel revenue plunged nearly 69% from 2019 to 2022, this surge provided a much-needed boost and positive momentum to the city's struggling hotels. Around 32 hotels are backed by commercial market-based securities loans in San Francisco, and more than a dozen have been placed on a loan servicer’s watch list.