OAKLAND — Sales activity for the hotel markets in the Bay Area and California, in a renewed sign of the sector’s collapse following the coronavirus outbreak, imploded during the first half of 2023.
The number of hotels sold in the Bay Area and statewide tumbled over the first six months of this year at a pace that was reminiscent of the nosedive that the lodging industry suffered in California in the wake of the last recession of 2008 and 2009.
“We have seen nothing like this, nothing this bad,” said Alan Reay, president of Irvine-based Atlas Hospitality Group, which tracks the hotel industry in California.
Reay’s reference point is broad: Atlas Hospitality has been analyzing the statewide lodging sector for more than 20 years.
Specifically, the number of hotels sold in California during the first half of 2023 plunged by 52.9% compared with the first six months of 2022, Atlas Hospitality Group reported.
In 2009, at the tail-end of the last recession, hotel sales in California tumbled 51%.
Both Northern and Southern California suffered huge declines in the sales of individual hotels, Atlas Hospitality reported.
Northern California endured a 44.6% plunge in individual hotel sales — specifically, 62 hotels were sold in this region in the first half of 2023 compared with 112 over the first half of 2022.
Southern California suffered a 58.9% nosedive in the number of hotels sold. An estimated 62 hotels were sold in that region over the first six months of 2023 compared with 151 in the first half of 2022.
The biggest hotel deal in Alameda County for the first half of 2023 was the purchase of the 276-room Claremont Hotel in the Oakland-Berkeley area for $163.3 million.
The largest hotel deal in Santa Clara County over the first six months of this year was the sale of the 89-room Arena Hotel in downtown San Jose for $22.9 million.