Weekday business travel fueled growth in Silicon Valley hotel occupancy and daily rates during 2013.
A new report shows that growth in Silicon Valley hotel occupancy and room prices accelerated during 2013, setting the stage for a busy 2014 in the region’s hospitality market.
Atlas Hospitality Group this week released new 2013 year-end data on California hotels, which documented a 94 percent increase in median room prices in Santa Clara County and a 40 percent median nightly rate increase in San Mateo County.
The upward trend has previously been illustrated on a local level by recurring monthly upticks in cities including San Jose and Santa Clara — the latter of which saw average hotel prices hit $177 per nightduring the busy fall months.
Those numbers put Silicon Valley well above state hotel industry averages last year. The region’s recent hotel boom has been fueled by workweek business travelthat dropped off during the recession.
Throughout California, median daily hotel rates increased 17 percent, Atlas found.
Sales of the hotels themselves increased 35 percent statewide to $4.7 billion. The $975,000 paid per room for The London West Hollywood made the property the most expensive purchase last year when broken down per unit.
Santa Clara County also saw a 180 percent increase in the value of hotel sales — bolstered by a $93 million deal for the 510-room Hyatt Santa Clara — despite a 36 percent drop in the number of overall transactions.
The challenge for Silicon Valley hoteliers will be to keep up with corporate demand while also minding a nagging dropoff in weekend travel to workaholic Silicon Valley. The potential for new competition from hotel investors circling the market is another factor that will likely loom large in the coming year, as we previously reported.