Hotel development has slowed in both the Bay Area and throughout California, according to a report released by Atlas Hospitality Group, which tracks the California lodging market.
An estimated 1,453 hotel rooms were under construction in the Bay Area during the first half of 2025, which represented a plunge of 46.7% from the 2,725 hotel rooms that were being built in the first half of 2024, the report shows.
Signia by Hilton San Jose hotel at 170 South Market Street in downtown San Jose, as pictured on June 25, 2024. (George Avalos/Bay Area News Group)
The region’s lodging development nosedive was worse than the construction decline in California overall and in Southern California, the Atlas Hospitality report showed.
An estimated 12,213 hotel rooms were under construction during the first six months of 2025 in California, down 21.4% from the 15,542 rooms that were being built statewide over the first half of 2024, according to Atlas Hospitality.
In Southern California, 6,995 hotel rooms were being built in the first half of 2025, which was down 21.9% from the 8,956 lodging units that were under construction in the first half of 2024.
Here is how hotel room construction looks so far in 2025 on a county-by-county basis compared with the first half of 2024, according to the Atlas Hospitality report:
— Santa Clara County: 72 hotel rooms under construction, an 89.5% drop from the 684 rooms being built during the similar period the year before.
— Alameda County: 234 hotel rooms being built, down 58.4%.
— San Francisco: 169 hotel rooms being built, down 50.1% from the year before.
— San Mateo County: 92 hotel rooms under construction, unchanged from the number the year before.
— Contra Costa County, Marin County and Solano County had zero hotel rooms under construction.
Napa County was the only county in the Bay Area with an increase in the number of hotel rooms under construction. Atlas Hospitality estimated 262 hotel rooms were being built in the first half of 2025, up 72.4% from the year before.
Widening woes have engulfed the Bay Area lodging sector.
— The 500-room Oakland Marriott City Center in downtown Oakland was seized through a foreclosure on July 8 that placed a $70.2 million value on a lodging tower that in 2017 was bought for $143 million.
— On May 12, the 541-room Signia by Hilton, a downtown San Jose lodging tower that is the South Bay city’s largest hotel, was seized through a foreclosure that valued it at $80 million, well below the foreclosed loan’s $134 million total.
— The 162-room Courtyard Oakland Downtown was bought in October 2024 for $10.6 million, a nosedive of 76% from its prior value.
— In August 2024, the Hilton Oakland Airport Hotel abruptly closed its doors, a shutdown that eliminated 152 jobs.
— The 145-room Waterfront Hotel in Jack London Square shut down without warning in late January.
— The 289-room Radisson Oakland received an appraisal of $15 million in October 2024, according to Morningstar. That was a 70% plunge from the hotel’s prior value.
— A 276-room dual-branded hotel at 1431 Jefferson St. in downtown Oakland was taken back by its lender through a streamlined foreclosure process.
— The 142-room Hyatt House Pleasant Hill was foreclosed on June 11.
— The 128-room Hyatt House Pleasanton was seized through a foreclosure in May.
— A 112-room Hyatt Place/Newark Silicon Valley is in default on its loan and could be taken by its lender through a foreclosure, according to documents filed in June.
“The problems in the hotel market are not going to end any time soon,” Alan Reay, president of Atlas Hospitality Group, said in a recent interview with this news organization.