Tom York on Business: Robust Market for Hotel Properties Signals Improving Travel Economy

Embassy Suites La Jolla recently changed hands at over $666,000 per room. Courtesy Hilton Hotels

Tourism, one of region’s most important industries, is showing signs of life after a disastrous 2020. Indeed, if transactions involving hotel properties are an indication of future economic trends, good things are ahead.

Sales of properties here were up 122%–from 22 in 2020 to 49 in 2021, according to Atlas Hospitality Group’s 2021 year-end hospitality survey.

The Orange County hospitality brokerage said in its report that the dollar volume for hotel sales was up 290% year over year.

The priciest transaction of the year involved the sale of the 340-room Embassy Suites La Jolla, with the price per room running more than $666,000.

The Hilton Mission Valley led sales in terms of the number of rooms. The hotel, which boasts 350 rooms, sold for $66 million.

Statewide, Atlas President Alan Reay said the year saw a record number of hotel sales at 510, up 71% over 2020. With dollar volume just missing $10 billion, up 200% from 2020.

Interestingly, San Francisco had a decrease in hotel sales, from nine in 2020 to six in 2021. The highest price per room ever paid for a California hotel at $2,542,373 per room for the 59-room Alila Ventana Inn & Spa in Big Sur.

“San Diego is high on the list of preferred choice for investors,” said Reay. “Over the past two years, owners have struggled due to the impact of COVID. So many are opting to sell, especially in light of the fact that buyers and lenders are pricing based on pre-COVID income and expenses. Many owners are realizing sales prices that are at or above 2019 values.”

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Low-cost carrier Allegiant Air is adding nonstop service between the Lone Star capital of Austin and San Diego beginning April 20, airport officials said recently.

The carrier will add seasonal nonstop service between Sioux Falls, SD, from May 19 through Aug. 12, according to information supplied by airport officials 

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San Diego real estate analytical platform Deckard Technologies  recently donated school kits to the Iglesia Pentecostal de Colombia Church in Medellín, Columbia.

The Comuna 13, San Javier, where the church is located, is a commune in the city of Medellín, which in the 90s was considered by some observers to be one of the most dangerous places in the world, given gangs and a corridor of drugs. The community has found, through culture and art, a way out of that burden, a spokeswoman said.

In addition to its headquarters in central San Diego, the real estate startup has offices in Columbia and Australia.

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Residential real estate sales referral platform HomeLight has produced an interesting insight into San Diego’s extremely competitive home market.

Nearly 27% of transactions here were all cash deals in the third quarter of 2021 — the highest percentage in seven years.

And nearly 60% of agents surveyed nationwide expect the cash phenomena to continue this year, including San Diego.

A third of buyers are first timers who can’t use the proceeds from their old home to buy another, and most still need a mortgage, according to a news release.

But the startup says it now “supports” more than $1 billion in transactions a year though its extensive network of agents.

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Another company closely linked to residential real estate, Home Depot, recently launched what it is calling its Path to Pro skills program, which offers training and networking to anyone interested in working in the building trades.

A shortage of workers has held back new housing inventory and affordability rates, according to a recent Home Builders Institute construction report. 

The company notes at its Path to Pro website that more than 300,000 construction jobs are currently unfilled, and another 3.5 million are expected to open over the next three years.

Home Depot, based in Georgia, operates 13 stores in San Diego.

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CamerEye, a local startup that claims to be reinventing swimming pool and backyard safety through artificial intelligence, says it has closed a $1.1 million seed-round. Crunchbase lists San Diego Sports Innovators as the investor.

The business says its AI system warns of potential drownings by creating a virtual smart perimeter around a pool via an AI camera that distinguishes people from other objects, reducing the false alarms experienced with other monitoring systems.

CamerEye says it has three patents pending and will add additional AI capabilities this year.

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Here’s an item to chew on. Baja Jerky, now under the Baja Vida umbrella, checks in to report that it has experienced a 337% increase in growth since 2019, but better yet, is expecting a 470% increase in 2022.

Baja Vida says it works with major distributors including KeHE, UNFI, Eby-Brown, Sysco and most recently McLane & Coremark.

The products are sold on Amazon, too.

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The Chargers professional football team may be gone, but they haven’t entirely forgotten us.

The team, now the Los Angeles Charges, has participated in a $50,000 grant to the San Diego’s Boys and Girls Club.

The money will be spent to restore the grass field at the nonprofit’s branch in Ramona.

The grant from the Chargers, the NFL Foundation, and the non-profit Local Initiatives Support Corp. is part of $6 million in field refurbishment awards allocated this year.

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Local commercial real estate investment firm Capstone Advisors says it has donated $75,000 to local nonprofits.

The firm chose the nonprofits based on input from tenants and employees. A spokesperson says the gift honors Capstone’s 25th anniversary.

Capstone owns and manages more than 5 million square feet of commercial properties throughout the U.S.

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Finally, this bit of North County business news.

Co-working space provider San Diego Downtown Works has expanded its space in Carlsbad by 50% — adding 13 offices, as well as more outdoor meeting areas and workstations.

Downtown Works Carlsbad now features a mix of 43 furnished private offices with adjustable desks, open desks, as well as virtual office options.

Meanwhile, the company says it will open another co-working site in Pacific Beach.

Tom York is a Carlsbad-based independent journalist who specializes in writing about business and the economy. If you have news tips you’d like to share, send them to [email protected]