Current:Home > NewsMajor hotel chain abandons San Francisco, blaming city's "clouded" future -Elite Financial Minds
Major hotel chain abandons San Francisco, blaming city's "clouded" future
View
Date:2025-04-25 00:49:07
Park Hotels & Resorts, one of the nation's largest hotel real estate investment trusts, is pulling out of two hotels in downtown San Francisco, saying it lacks confidence in the city's ability to overcome "major challenges."
Park Hotels said that it has stopped making payments toward a $725 million loan backed by two of its San Francisco properties, the 1,921-room Hilton San Francisco and the 1,024-room Parc 55 San Francisco.
Both hotels are located near the Moscone Center, a conference venue that prior to the pandemic drew throngs of professionals to the area. San Francisco hasn't fully recovered since COVID-19 shut down the economy in 2020, with many office buildings still largely empty as workers continue to work remotely. A rash of thefts last year and rising homelessness have caused some retailers to pull out of the city.
Thomas J. Baltimore, Jr., the chairman and CEO of Park Hotels, cited empty offices and reduced business travel as factors that have made owning the hotels untenable.
"Now more than ever, we believe San Francisco's path to recovery remains clouded and elongated by major challenges," Baltimore said in a statement this week.
He said the city's challenges include: "record high office vacancy; concerns over street conditions; lower return to office than peer cities; and a weaker than expected citywide convention calendar through 2027 that will negatively impact business and leisure demand and will likely significantly reduce compression in the city for the foreseeable future."
Both properties are expected to be removed from Park Hotels' portfolio, which includes 46 hotels and resorts with more than 29,000 rooms.
Hit to business travel
Prior to the pandemic, San Francisco was a magnet for business travel. But since the crisis, event bookings have slowed and foot traffic has receded.
In 2022, San Francisco experienced the steepest drop in revenue from business travel of any major metro area, according to data from the American Hotel & Lodging Association (AHLA). Revenue plunged nearly 69%, or $1.68 billion, compared to 2019.
To be sure, some businesses are still turning to the city for events, with JPMorgan holding its annual health care conference this year in the Union Square neighborhood after a two year pandemic-related hiatus. But other firms have cancelled events, deterred in part by street conditions like graffiti and homelessness.
And some retailers have closed their San Francisco locations, citing crime and other issues. Whole Foods in April temporarily closed one of its flagship stores just a year after it opened, citing concerns that crime in the area was endangering its staff. Other retailers that have announced downtown closures include Nordstorm, Anthropologie and Office Depot, according to local station KRON.
- In:
- San Francisco
veryGood! (5)
Related
- Google unveils a quantum chip. Could it help unlock the universe's deepest secrets?
- A man is arrested months after finding a bag full of $5,000 in cash in a parking lot
- ‘Breaking Bad’ stars reunite on picket line to call for studios to resume negotiations with actors
- Youngkin calls lawmakers back to Richmond for special session on long-delayed budget
- Bodycam footage shows high
- The EPA removes federal protections for most of the country's wetlands
- HBO shines a light on scams in 'Telemarketers' and 'BS High'
- Suits Creator Reveals Irritating Feedback Royal Family Had for Meghan Markle's Character
- Apple iOS 18.2: What to know about top features, including Genmoji, AI updates
- Revelers hurl tomatoes at each other and streets awash in red pulp in Spanish town’s Tomatina party
Ranking
- California DMV apologizes for license plate that some say mocks Oct. 7 attack on Israel
- 2 found dead in Michigan apartment with running generator likely died from carbon monoxide
- Trades dominate the day as NFL teams trim rosters to 53 players
- Ambulance rides can be costly — and consumers aren't protected from surprise bills
- Costco membership growth 'robust,' even amid fee increase: What to know about earnings release
- Dolly Parton reveals hilarious reason she couldn't join Princess Kate for tea in London
- West Virginia University recommends keeping some language classes, moving forward with axing majors
- How to win USA TODAY Sports' NFL Survivor Pool: Beware of upsets
Recommendation
California DMV apologizes for license plate that some say mocks Oct. 7 attack on Israel
Elton John spends night in hospital after falling at his home in Nice, France
The problems with the US's farm worker program
Judge finds defrocked cardinal not competent to stand trial for sex assault
Bodycam footage shows high
2 found dead in eastern Washington wildfires identified, more than 350 homes confirmed destroyed
Boston will no longer require prospective spouses to register their sex or gender to marry
Acuña’s encounter and Guaranteed Rate Field shooting raise questions about safety of players, fans