San Diego Faces Tourism Slowdown but Optimism Remains for 2026, Here’s All You Need to Know

Published on November 30, 2025

The South California area was one of the most reliable locations in the U.S. economy and tourism sector. Now it is showing an abrupt decline instead of the usual steady growth. Virtual data and services, such as data training, provide services like lower levels of crime, lower levels of complain, and lower levels of reported incidence and is lower on the levels of revenue. Though the growth was significant in the previous months, the City is now entering a season of stagnation. San Diego has dominantly supported the economy in the tourism sector, now is facing its most stagnated season. This is evident through increased hotel stays and retention, paired with a diminished international visitation alongside an increment in the volume of absent travelers.

Tourism Slowdown in San Diego: A Decrease in Hotel Stays

One of the most visible signs of the tourism downturn in San Diego is the decline in hotel occupancy. Despite the city’s ongoing appeal as a tourist destination, recent data shows a noticeable dip in hotel stays, particularly during the autumn months. Local businesses, such as Action Sport Rentals, which offers paddleboards, Jet Skis, and powerboats to vacationers, have seen a 17-18% drop in revenue compared to last year.

The owner of Action Sport Rentals, Steve Pinard, highlighted how he is resorting to promotions, offering discounts during holiday periods like Thanksgiving to maintain customer interest. However, he remains cautiously optimistic, expecting a “flat” performance next year. The drop in bookings, especially for longer stays, is a trend that many other businesses in San Diego are now facing.

The Aftershocks of Revenge Travel and Economic Uncertainty

San Diego, like many global destinations, saw a boom in tourism as Americans began traveling again following the pandemic. This so-called “revenge travel” led to record visitation and high spending. However, with the economic outlook growing more uncertain, travelers are scaling back, particularly when it comes to discretionary spending on luxury vacations, dining, and extended hotel stays. As disposable incomes shrink and costs rise across various sectors, many travelers are opting for shorter, more budget-conscious trips, particularly from regional markets like Arizona and Nevada.

Travel managers across the city are reporting that while there are still international visitors, the volume is not what it was during the post-pandemic travel surge. The uncertainty surrounding tariffs, inflation, and economic policies has dampened the enthusiasm for longer or more extravagant vacations.

The Impact of International Visitation Decline

International visitation to San Diego has significantly dropped, which is particularly concerning given that foreign tourists traditionally contribute more to the local economy. Although international tourists account for just 10% of all visitors to the city, they typically stay longer and spend more. In recent years, international arrivals from countries such as Canada and China have dwindled.

The decline in Canadian visitors, who once made up a significant portion of the tourist population, is attributed to ongoing political tensions and changing travel preferences. Similarly, Chinese visitation to San Diego has fallen dramatically, dropping from 119,000 visitors in 2019 to just 54,370 this year. This decrease has added to the strain on the local tourism industry, which had relied heavily on international tourism for revenue growth.

Local Hotels Struggling to Maintain Revenue

Local hotel operators are particularly feeling the pinch, as the slower-than-expected summer season resulted in lower-than-anticipated revenues. Robert Gleason, president of Evans Hotels, which operates three major properties in the city, stated that even established hotels like the Bahia, Catamaran, and Lodge at Torrey Pines are generating less revenue compared to the previous year.

Smaller, independent hotels are also experiencing the brunt of this decline. Elvin Lai, owner of the Ocean Park Inn in Pacific Beach, shared that his hotel has seen a drop in both the number of bookings and the average daily rate. Lai emphasized that while larger hotels can absorb the impact by offering discounts, smaller properties like his don’t have that flexibility, making it more challenging to stay afloat.

The decline in bookings, coupled with rising operational costs for hotels, means many are struggling to maintain profitability. The lack of group business, which many hotels rely on, has exacerbated this issue, with more hotels now vying for the same leisure market.

San Diego Tourism Authority’s Response: New Campaigns to Boost Visitation

Despite the current challenges, the San Diego Tourism Authority remains hopeful and is taking steps to reignite interest in the city’s offerings. With a new marketing campaign set to launch, the authority aims to attract regional travelers from areas like Los Angeles, Phoenix, and Seattle. The campaign, which replaces the city’s long-standing “Happiness is calling” slogan, focuses on optimism, showcasing San Diego’s welcoming environment, sunny weather, and vibrant cultural scene.

Kerri Kapich, Chief Operating Officer of the San Diego Tourism Authority, mentioned that although the outlook is cautious due to economic uncertainty, there is optimism in the long-term potential of the city. The tourism authority is also planning to spend $18 million on media marketing, using platforms like the Farmers Insurance Open at Torrey Pines to kickstart the campaign in late January.

Navigating the Future: Balancing Challenges and Opportunities

As San Diego faces a period of stagnation, there is still hope for the future. Tourism professionals are closely monitoring the economic environment, with many businesses hoping for a shift in market conditions in 2026. While the current slowdown is concerning, it is not a complete retreat, and the city is positioning itself for a rebound in the coming years.

By investing in new marketing efforts, improving tourism infrastructure, and offering unique experiences, San Diego hopes to re-establish itself as a top destination for both leisure and business travelers. As part of its strategy, the tourism sector will also need to focus on attracting more international tourists, rebuilding the appeal of longer stays and premium experiences, and responding to shifts in global travel behavior.

The Path Forward for San Diego Tourism

Despite all of the difficulties posed by the pandemic, the San Diego Tourism Marketing District remains positive in its outlook, recognizing all of the potential strengths of the city. Marketing efforts, infrastructure growth, strategic business focus, regional/sustainability cooperation, and the new tourism activities all combine in preparation for the tourism comeback, despite international competition in the tourism growth.