Does California have a hotel bubble?

August 18, 2015

home sales downHotel buyers are spending in record fashion in California this year. [OC Register]

Buyers spent $4.4 billion on 174 California hotels in the first half of 2015, according to Atlas Hospitality Group of Irvine. That surpassed the annual total spent on hotels for every year except 2006.

Hotel buyers spent 64 percent more in the first six months of 2015 than they did over the same period of 2014. The median sales price shot up 65 percent over three years, according to Atlas.

In January, luxury hotel owner Strategic Hotels & Resorts Inc. purchased the 250-room Montage Laguna Beach for $360 million. The sale set a California price record of $1.4 million per hotel room.

Strategic Hotels executives are now saying they are considering a possible sale of the company.

Last year, Hotel Oceana in Santa Barbara sold for $41.7 million. It was purchased by a Philadelphia company.

The Inn At Avila Beach was recently on the market for $7.95 million. It is a 31-room economy hotel.


Loading...

11 Comments

  1. unlisted says:

    The Inn at Avila Beach is an economy hotel??? I wonder what CCN considers a Comfort Inn or Days Inn? Are these dumps?

    (0) 0 Total Votes - 0 up - 0 down
  2. CentralcoastRN says:

    I believe I saw some old hotel rooms that were converted to tiny condos being sold on the market for like 400k in Pismo. I will see if I can post the link.

    http://www.slocountyhomes.idxbroker.com/idx/details/listing/a063/1046605/198-Main-Street-305

    Yep. You can have less than 400 square feet for 400k. What.a.bargain. LOL.

    Obviously we don’t need more hotels. The ones we have are being converted, and there are so many in SLO they become seedy drug hotels. Maybe they can build one next to Ashbaugh’s house!

    (1) 5 Total Votes - 3 up - 2 down
    • unlisted says:

      Read the listing!

      That building’s still a HOTEL. The rooms will just be owned by individual investors, rather than the hotel management company. Arrangements like this are called “condotels.” It’s been going on for years in resort areas.

      (0) 0 Total Votes - 0 up - 0 down
      • CentralcoastRN says:

        I read it.

        Is this a “resort” area? Do we have snorkeling, warm beaches, awesome nightlife, bustling entertainment? I think of those things and more when I think of a resort. The rooms have no kitchen, it is a hotel room that you buy it seems. The view is nice though and location is great.

        If there is a NEED for all these hotels, then GREAT! I am not trying to dissuade someone from buying a condotel or whatever. I am just wondering if all this development is needed.

        (0) 0 Total Votes - 0 up - 0 down
  3. slolusion says:

    California is preparing to become Florida, I guess. You can ask them how well those jobs pay and what kind of lifestyle you get. Perhaps SLO simply has run out of economic options and accepts that tourism is it’s future.

    (4) 6 Total Votes - 5 up - 1 down
  4. tomsquawk says:

    try and build a new hotel/motel within the coastal zone. you must have a percentage of affordable rooms. probably easier to buy than build

    (1) 7 Total Votes - 4 up - 3 down
  5. mbbizpro says:

    If there is demand for these types of skills, why not teach them at Poly. They have a Social Sciences Dept. Would this not be perhaps more valuable in our local economy with the number of hotels, restaurants, wineries? Kids graduate Poly, many wanting to remain in the area, and can’t find employment to do so. This will help them learn about an industry that may be one of the largest employers in the county.

    (0) 8 Total Votes - 4 up - 4 down
  6. womanwhohasbeenthere says:

    Timely article, as Cal Poly plows ahead to build a hotel/hospitality school at the center of the campus. So much for a Polytechnic school – and let’s compete with the private sector restaurants and hotels who have served Poly parents and students so well all these years. Meeting on this at Cafe Roma 9-17. Learn more and the impact this will have on local businesses who don’t enjoy subsidies.

    (14) 18 Total Votes - 16 up - 2 down
    • Jorge Estrada says:

      Cal Poly works under the flag of their foundation to fund these non CSU ventures. They get to compete in the private sector with the perks of a State Agency.

      (5) 13 Total Votes - 9 up - 4 down
      • NorCoMod says:

        Pretty sweet deal.
        Enter the private sector world with no fear of any competition because they have absolutely no risk.

        (2) 8 Total Votes - 5 up - 3 down
    • zaphod says:

      that word “polytechnic”
      does it mean our technic school is being impurified by the hospitality industry ?
      (disclaimer: wealthy cousin has degree in hospitality)

      (-1) 5 Total Votes - 2 up - 3 down

Comments are closed.