However, industry insiders are optimistic about a rebound in 2025, fueled by a robust event calendar and a resurgence in convention business.
The city faced several headwinds in 2024, including weak convention bookings, the absence of major events like the Asia-Pacific Economic Cooperation summit, and the impact of hotel labor strikes. These factors resulted in stagnant hotel occupancy, declining average daily rates (ADR), and a significant drop in revenue per available room (RevPAR).
"We knew 2024 would be challenging," said Emmy Hise, senior director of hospitality analytics for CoStar. "The hope for last-minute convention pickups didn't materialize."
San Francisco's hotel rate recovery from 2019 levels has been the slowest among all U.S. markets, a stark contrast to its pre-pandemic position as a leader in high room rates.
A new chapter begins
Despite the challenges, industry leaders are optimistic about 2025. Anna Marie Presutti, CEO of the San Francisco Travel Association, acknowledged the difficulties of the past year but emphasized the city's resilience.
"We're turning the corner," Presutti said. "While international tourism and the return of Asian travelers are still recovering, the city is making strides in addressing public safety concerns."
Crime rates have declined, and homelessness rates have reached a 10-year low. The city has invested in increased police presence and expanded social services to address these issues.
A calendar of high-profile events
A series of high-profile sporting events, including the NBA All-Star Game, NCAA March Madness, and the Laver Cup, will bring significant attention to San Francisco throughout 2025.
"You won't be able to turn on the television without seeing San Francisco," Presutti said.
The city is also set to host major events in 2026, including FIFA World Cup matches and the Super Bowl, further solidifying its position as a premier destination for global events.
Convention business is showing signs of recovery. Microsoft's decision to host its Ignite convention in San Francisco with just one year's notice is a significant departure from the typical booking window and demonstrates a renewed confidence in the city.
Boosting visitor experience
San Francisco Travel has implemented several initiatives to enhance the visitor experience. These include designated entertainment zones with expanded outdoor alcohol service, increased street festivals, and night markets.
"We're showcasing the best of San Francisco while introducing new and exciting experiences," Presutti said.
The city anticipates a significant increase in visitor volume and spending in 2025. Hotel occupancy and ADR are also projected to rebound.
