Amid decline, LA still leads CA in hotel development: report

But new hotel rooms in LA declined 65 percent from 2017

Los Angeles /
Jan.January 28, 2019 04:00 PM
Palihouse lobby, West Hollywood (Credit: Booking.com)

Los Angeles County is leading the state in hotel development by a landslide.

A new report from Atlas Hospitality Group revealed there are 6,727 rooms under construction in the county, double the amount in Santa Clara County up north, which ranked second.

More hotel rooms also opened in L.A. County last year than anywhere else in California. In 2018, 11 new hotels with a combined 1,526 rooms opened. San Diego followed with 1,224 rooms.

Overall, there are 203 hotels with 29,114 rooms under construction in the state. There were 52 new hotels with 6,592 rooms that opened in 2018.

Yet, despite ranking first in many categories, L.A. is showing signs of a slowdown in its hotel construction boom.

The number of hotel rooms dropped 65 percent from 4,309 rooms in 2017 to 1,526 rooms in 2018, according to the report.

Hotel transactions also dropped 4 percent year over year to 48 trades, while total-dollar volume decreased 14 percent to $1.4 billion in 2018. Still, hotels are increasingly expensive in the area — the county’s median price per room increased nearly 18 percent to $11.8 million.

The Doubletree Westside in Culver City, Hotel MdR in Marina del Rey and Palihouse West Hollywood are among the most expensive hotels to have traded last year, The Real Deal previously reported.

Developers remain active, too. There are about 250 hotels with 39,974 rooms in various stages of planning in the county, up 19 percent from 2017.

Yet previous reports from Atlas estimate that only about a quarter of those may get completed. A report last January from the hotel brokerage firm estimated that around 10,000 new hotel rooms would come online in L.A. in the next few years — even though 33,500 hotel rooms had been proposed.


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