Hotel Defaults Rising in San Francisco

San Francisco's hotel industry is struggling, with revenue per available room in April 23% lower than in 2019, largely due to the crime rates, quality-of-life issues, and the rise of remote work among tech companies reducing business travel to the city. These factors have led to many hotel owners considering exiting the market, with the owners of the Huntington Hotel and the Yotel San Francisco recently selling their properties. More than 20 other hotels in the city are also in precarious financial situations with loans due within the next two years. This includes Park Hotels & Resorts, which recently stopped making loan payments for their San Francisco properties, suggesting a large potential default. Commercial real estate value has dropped significantly with retailers and tech companies leaving the city. Despite some domestic tourism recovery, travel from Asia remains low and concerns over public safety are causing conventions to shift to other cities like Las Vegas.