Afrigather Just like different resort locations in California, Monterey County was initially affected by the COVID-19 pandemic; nevertheless, the financial results in 2020 had been considerably minimized by the market’s proximity to the San Francisco Bay Space. Monterey’s attraction as a picturesque, lower-density, drive-to vacation spot drew important curiosity from these looking for refuge from city facilities in the course of the pandemic.
In line with STR, Monterey County skilled a sooner rebound throughout all resort efficiency metrics in 2021 than the San Francisco Bay Space, pushed by a surge in demand for out of doors leisure sights, reminiscent of Pebble Seaside Golf Resorts, Massive Sur, and WeatherTech Raceway Laguna Seca. This progress pattern continued into 2022, when RevPAR surpassed 2019 ranges, pushed by robust will increase in ADR.
Transient occupancy tax (TOT) is a resort tax collected by the county that gives a superb indication of lodging income developments. TOT collected by Monterey County reached an all-time excessive within the 2021/22 fiscal 12 months, surpassing $40 million, with key occasions such because the Concours d’Magnificence held throughout Monterey Automotive Week drawing high-rated journey. Historic TOT developments for the county are illustrated on the desk under.
Nevertheless, like different drive-to locations close to the Bay Space, reminiscent of Sonoma and Napa, occupancies in Monterey County stay under pre-pandemic ranges. Per STR, year-end 2023 occupancy reached roughly 90% of 2019 metrics, and the year-to-date 2024 efficiency has remained comparatively flat. This pattern is a results of the slower rebound of assembly/group demand and stagnant visitation ranges attributable to the extended financial restoration of the Bay Space.
New Improvement
Lodge developments in Monterey County face excessive obstacles to entry primarily as a consequence of its coastal nature, escalating development prices, and rising rates of interest, which considerably improve the monetary burden on builders. Regardless of these challenges, the robust and constant leisure demand within the space continues to draw builders eager to capitalize available on the market’s potential. The area’s pure magnificence, well-liked sights, and favorable local weather guarantee a gentle inflow of vacationers, making it an attractive funding alternative. Because of this, builders are regularly exploring modern methods and looking for monetary options to beat these obstacles and set up a presence on this profitable market.
Given the obstacles to entry, there has solely been a modest improve in resort provide throughout the county over the past a number of years. In Marina, a 90-room Hampton by Hilton opened in February 2023. Extra lately, a 93-room Home2 Suites by Hilton opened on this market as a part of a three-phase group improvement that’s slated to be absolutely built-out by the spring of 2025. This group improvement, often called The Dunes on Monterey Bay, will characteristic over 1,200 single-family properties, roughly 400,000 sq. toes of retail house, a film theatre, a 140,000-square-foot VA clinic, a 26-acre enterprise park, and two lodges (each already open).
Lastly, after greater than a decade of planning and hypothesis, a groundbreaking ceremony was held for the 101-room Kimpton Lodge in Pacific Grove in late September 2023. This boutique resort is predicted to open in 2025 and would be the model’s first property inside Monterey County.
Wanting Ahead
Regardless of stagnation in demand for the Monterey lodging market, there’s a rising sense of optimism for a full restoration within the close to time period. Elevated journey from the Bay Space, alongside a resurgence of worldwide visitation, is bolstering the native tourism business. Moreover, the county’s out of doors leisure actions and occasions proceed to attract new guests. Concurrent with the financial enchancment within the San Francisco Bay Space, Monterey’s lodging market is anticipated to proceed towards a full restoration.
Our distinctive methodology, which entails conducting major interviews inside native markets, permits us to collect real-time insights and present information. This method ensures an in-depth understanding of every market we function in. For complete details about the Monterey County market or for help in making funding selections that align together with your particular objectives and threat tolerance, we invite you to achieve out to Curtis Herbolich, your HVS Northern California hospitality professional.
