Demand for hotel rooms in key California business markets is pushing up room rates far above the national average, according to a new report.
STR, a firm that tracks hotel industry performance and metrics, this week released data for room rates in major cities during the week of March 13-19 and compared them with the same period a year earlier.
It found that among the nation’s top 25 markets, the biggest increase in average daily rates was in Los Angeles/Long Beach, where the average room rate soared by 14 percent, to $174 per night. The higher room rates corresponded with a big increase in demand: STR said the average occupancy rate for Los Angeles/Long Beach hotels hit 88 percent, a gain of 6.4 percent.
That compares with the national average of daily rates that increased just 4.2 percent (to $127) and occupancy of 70.5 percent, a gain of 1.9 percent.

Impressive lobby in the brand new Axiom Hotel near San Francisco’s Union Square CLICK (Photo: Axiom)
The company also found substantial rate increases in two other California markets: San Francisco/San Mateo and Anaheim/Santa Ana. It said the average room rate in the San Francisco area jumped 11.3 percent year-over-year to $240 a night, while the average rate for Anaheim/Santa Ana hotels rose 10.7 percent to $154. (Note that the rate period studied – March 13-19 – does not include the Super Bowl period, when San Francisco room rates ballooned even more.)
Looking at a different metric – revenue per available room, which includes more than just the room rate and thus reflects overall guest spending – STR found even larger year-over-year gains for those three markets – 21.3 percent for L.A./Long Beach, 16.6 percent for Anaheim/Santa Ana and 16.0 percent for San Francisco/San Mateo, ranking them number one, two and three in the nation. It also found a 12 percent increase in revenue per available room for San Diego hotels.
Some observers have suggested that the rapid growth of Airbnb would draw enough business away from hotels to put downward pressure on rates – but that’s apparently not the case in Los Angeles. The LA Times reported last week that from May 2015 to January 2016, the number of Airbnb listings for Los Angeles County skyrocketed by 42 percent.
Just goes to show that California is once again hot-hot-hot, repeating its historic rythym of boom and bust.
What’s your favorite California hotel? Why? Have you noticed higher rates? Please leave your comments below.
NOTE: Be sure to click here to see all recent TravelSkills posts about: Should I tip my Uber driver? + Boeing 747 nearing its end? + Bargain hunters travel guide for 2016 + World’s best airline lounge? + Fares to Europe tumble
Do you follow us on Twitter? It’s a great way to keep up with the latest news!
Please join the 125,000+ people who read TravelSkills every month! Sign up here for one email-per-day updates!
Couldn’t agree with this any more, both of my trips to California in December and February were very painful. Marriotts that I use to get for $120 last year is now $200 to $280, amazing.
The Montage properties in Laguna Beach and Beverly Hills. Rates are up significantly over the past year. Same story with another one of my favorites, the Ritz at LA Live. All three of these hotels are up significantly more than 6.4% for the LA area. The STR of 21.3% is too high for the changes I have noted at these 3 properties. Double digit percentage increase for all three.
Sorry, Chris, didn’t mean to “rant”. 🙂 I still think that comparing March 13-19, 2016 to March 13-19, 2015 is not credible statistically (the actuary in me). Although these weeks did not include the SuperBowl, there could have been other one-time events that impacted rates those weeks. It just seems to make more sense to average over a longer period of time, that’s all.
Hey GG: Might want to reread the post and rethink your rant. — chris
OMG, not another hotel rate study comparing a tiny sample of data! That makes no sense. Why not compare the last 12 months to the 12 months before that, maybe with the Super Bowl removed? I wouldn’t report these horrible “studies”.