SAN FRANCISCO TRAVEL ASSOCIATION FORECASTS LODGING GAINS IN 2023
SAN FRANCISCO TRAVEL ASSOCIATION FORECASTS LODGING GAINS IN 2023
Aug. 17, 2023 – The San Francisco Travel Association released an updated 2023 Visitor and Lodging Forecast at the inaugural Visitor Impact Summit hosted by the Hotel Council and San Francisco Travel today at the Fairmont San Francisco.
Demand for hotel rooms in San Francisco grew year-to-date by 15%, and hotel revenues rose by 30%. The average hotel occupancy in 2023 is projected to increase to 66.8%, up from 62% in 2022. Events and conventions have helped to drive lodging performance, with San Francisco’s premier convention and exhibition facility, Moscone Center, hosting 35 events and accounting for nearly 665,000 hotel room nights this year.
“Convention business has performed well, and the calendar is strong through mid-December with major events such as Dreamforce and APEC’s Economic Leaders’ Week and CEO Summit being held at Moscone Center. Events such as these draw tens of thousands of attendees, and APEC will place the city in the global spotlight,” said Joe D’Alessandro, San Francisco Travel’s President and CEO.
Hotel room inventory in the city is expected to grow by 4% this year compared to 2022. San Francisco hotels are forecast to achieve an average daily rate (ADR) of $246.09, up 7.7% from 2022, and a revenue-per-available room (RevPAR) of $164.29, an increase of 15.9%.
Visitor volume to San Francisco is forecast to increase by 6.2% to 23.3 million, and visitor spending is forecast to reach $8.5 billion, up 13.9% from 2022. While San Francisco’s tourism industry is steadily recovering, San Francisco Travel said it does not expect tourism to exceed the industry’s record-breaking pre-pandemic levels for a few more years.
“San Francisco is still a great investment and still one of the world’s top tourist destinations,” said Alex Bastian, President & CEO of the Hotel Council of San Francisco. “This fall’s upcoming APEC Conference gives San Francisco a great chance to shine on the world stage. Working together with our city leaders and hospitality partners, we’ll continue to lean into the City’s recovery.”
“We are focused on ensuring a safe and welcoming City for our residents, workers and businesses, and visitors from around the world,” said Mayor London Breed. “Tourism is a major contributor to San Francisco’s economic recovery, and we are beginning to see strong improvements with people coming back. There is a renewed excitement and energy happening in the City and we will keep building on this momentum to ensure San Francisco remains a top global destination that is vibrant and thriving so that people will continue to visit and spend time in our City.”
Nearly two million international visitors—a key segment of San Francisco’s tourism industry due to their longer length of stay and higher spending—are projected to spend $4.2 billion this year. The U.K., Europe and India remain strong overseas visitor markets for San Francisco, while Mexico and Canada remain the city’s largest international visitor source markets.
Comparing August 2019 with August 2023, San Francisco International Airport (SFO) reported that 94% of weekly international flights have resumed, and weekly seat capacity is 93.6% of pre-pandemic levels. New airlines added to the SFO network this year include ITA Airways, Norse Atlantic and ZIPAir, flying from Rome, London and Tokyo, respectively. SFO is now served by 40 international carriers and will increase to 41 with the addition of Starlux flying from Taipei in December 2023. Prior to the pandemic, SFO was served by 43 international carriers.
SAN FRANCISCO 2023 VISITOR & HOSPITALITY FORECAST
| 2019 | 2022 | Forecast 2023 | % + YOY 2023 | |
| Visitor Arrivals | 26.21M | 21.94M | 23.3M | 6.2% |
| International Overnight Visitors | 2.95M | 1.74M | 1.99M | 14.6% |
| Domestic Overnight Visitors | 7.48M | 5.43M | 6.01M | 10.8% |
| No. of Moscone Center Events | 49 | 33 | 35 | 6.1% |
| Visitor Spending | $9.56B | $7.47B | $8.5B | 13.9% |
| International Overnight Visitor Spending | $5.11B | $3.67B | $4.22B | 15.0% |
| Domestic Overnight Visitor Spending | $3.18B | $2.4B | $2.82B | 17.3% |
| Day Visitors | 15.78M | 14.77M | 15.3M | 3.6% |
| Day Visitors Spending | $1.27B | $1.39B | $1.46B | 5.1% |
| SF Hotel Occupancy | 82.7% | 62.0% | 66.8% | 7.6% |
| Exhibitor/Planner Direct Spend | $721.9M | $294.9M | NA | NA |
| Hotel ADR | $273.61 | $228.58 | $246.09 | 7.7% |
| Hotel RevPAR | $226.22 | $141.79 | $164.29 | 15.9% |
| Hotel Room Nights Associated with Conventions | 967,861 | 338,549 | 664,749 | 96.4% |
2024 OUTLOOK
San Francisco Travel expects to see Asian inbound visitation grow further in 2024 following last week’s announcements that China had lifted restrictions on group tours to the U.S. and weekly flights between China and the U.S. will double starting in September. United Airlines announced plans to relaunch service from SFO to Beijing in November and increase service to Shanghai in October with daily nonstops from SFO. In 2019, 518,000 visitors from China accounted for $1.2 billion in visitor spending in San Francisco and the Peninsula.
Continued growth in international and domestic leisure and business travel will drive San Francisco’s ongoing tourism recovery in 2024. Visitor volume is expected to reach 24.3 million, with 2.3 million international visitors forecast to contribute $4.8 billion of the anticipated $9.4 billion in total visitor spending. Moscone Center is slated to host 21 events accounting for 426,951 hotel room nights, down 34% compared to 2023.
“Since 2019, we’ve been reporting 2024 would be a more challenging year for conventions given some cancellations and it being an off year for rotational events. But every year after 2024 shows steady growth in conventions, with 2028 and beyond trending to be above 90% of the average,” said D’Alessandro.
To attract more events to Moscone Center in future years, San Francisco Travel is leveraging the existing Moscone Recovery Fund and the 0.25% TID increase that goes into effect in 2024. The TID increase will build an $8 to $10 million incentive fund to attract and retain business at Moscone Center through 2038.
So far this year, San Francisco Travel’s Convention Sales team has confirmed 16 events at Moscone Center, ranging from the 2024 Visa Payments Forum (to be held in the city for the first time) to the 2026 Super Bowl LX & NFL Experience. In addition, over 500 self-contained meetings and events have been booked year-to-date. These shorter-lead meetings will take place at hotels and event venues in the Bay Area, primarily in 2023 and 2024 in San Francisco.
The 2024 lodging outlook projects a hotel occupancy of 68.1% and an ADR of $252.59. RevPAR is expected to increase by 4.7% to $172.04.
The Visitor & Lodging Forecast projects visitor spending will exceed 2019’s record high of $9.6 billion in 2025 and visitor volume will be just shy of 2019’s 26.2 million by the end of 2026.
Presented by Expedia, the Visitor Impact Summit was made possible with support from sponsors, including the Fairmont San Francisco; J.P. Morgan Wealth Management; Miles Partnership; Encore; Headshots and the San Francisco Business Times.
THE HOTEL COUNCIL OF SAN FRANCISCO
The Hotel Council of San Francisco is a non-profit membership-based organization advocating for the economic and social vitality of the hospitality industry in San Francisco. Their membership roster includes over 200 hotels, allied members, and partner organizations. The Hotel Council is dedicated to protecting the San Francisco hospitality industry and connecting its members to support the growth and success of the industry.
The San Francisco Travel Association is the official destination marketing organization for the City and County of San Francisco. The city is one of the top tourism and meetings destinations in the U.S. and received 21.9 million visitors in 2022. Total tourism spending in 2022 exceeded $7.7 billion. The tourism industry is the largest generator of outside revenue into San Francisco’s economy and supports over 53,000 jobs.
For information on reservations, activities and more in San Francisco, visit www.sftravel.com.
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