The city’s hotel industry has had a brutal year.
That was the resounding takeaway of San Francisco Travel’s annual Visitor Impact Summit, which gathered several hundred hospitality leaders Tuesday into a conference room downtown.
“We’ve had a very tough, challenging year — it’s been ruthless,” Alex Bastian, president and CEO of the Hotel Council of San Francisco, said onstage at the event.
The number of conferences in the city declined, as did domestic tourism. Instead of traveling within the U.S., people are jetting off on vacations abroad, SF Travel found, while the number of high-spending international tourists largely hasn’t returned to 2019 levels. Meanwhile, several speakers noted that the perception of San Francisco’s safety issues has tarnished the city’s reputation since the pandemic.
These factors have culminated in a tough year for hotels, with declines in occupancies, average daily rates, and revenue per available room. Even SF Travel’s modest growth estimates failed to come to fruition, said Brett Allor, the organization’s VP of market research.
“We missed that forecast a little bit,” Allor said, to the grim laughter of attendees while a slide of the hotel industry’s declines showed above him.
Gallows humor aside, the outlook seems to be improving, according to the organization. This year, 23.22 million visitors are projected to inject $9.24 billion into the city’s economy; 2025 should see an increase to 23.9 million visitors and $10 billion in spending.
That’s reason for optimism, said SF Travel President Anna Marie Presutti.
“Some of it is good news, some of it I wish was better news, but we didn’t hear bad news, thank God,” Presutti told The Standard of the data and forecasts presented at the conference. “We’re getting out of this: 2024 was a struggle, but the future looks much better.”
One of the starkest issues the city has faced this year is a drop in corporate events: The Moscone Convention Center will host just 25 in 2024, versus 34 in 2023. That has led to a decrease in hotel bookings: Conferences have accounted for 413,000 nights in hotel rooms this year, down from 618,962 last year.
While the industry received welcome reassurance last week when Salesforce committed to hosting its Dreamforce extravaganza for the next three years, the overall outlook for corporate events in 2025 isn’t great. The conference rotation will improve next year but won’t reach 2023 levels: The Moscone Center is set to host 29 events next year, accounting for more than 590,000 hotel-room nights.
Presutti — who officially took the SF Travel helm this week after leading in an interim role for several months while managing Hotel Nikko — plans to go into sales mode to convince more companies to bring their events back to San Francisco.
“It’s not just convention sales, it’s tourism sales and international sales, and getting business travel back,” she said. “We’ve got to get more people in the city.”
She cited the success of Dreamforce and the annual RSA security conference as helping to drum up interest and touted upcoming sporting events, like the Super Bowl and the FIFA World Cup in 2026, as drawing folks back to SF.
Other conference speakers included Karina Herold of the Bay Area Host Committee, who helped win those sports contracts, and Bob Fisher, whose family founded Gap and who has funded events like downtown’s First Thursdays.
A panel on cleaning up the city featured District Attorney Brooke Jenkins, Police Chief Bill Scott, and Office of Workforce and Development Executive Director Sarah Dennis Phillips, who discussed how the city has been cracking down on crime and trying to help small-business owners.
Melissa Andretta, who runs marketing at San Francisco International Airport, shared data about the airport’s declining international visitors, particularly from China. She described SFO as “more of a connecting airport now,” with the number of connecting passengers up 30%.
Presutti grimaced at that descriptor.
“Anytime you see an airport becoming a ‘pass-through’ airport versus a ‘stay-over’ airport, you just kind of go ‘ugh,’” she said. “We’ve got to shift that. But the tides go in and they go out, and they’ll come in again.”