San Diego Tourism Slows: Hotels See Drop in Guests as 2025 Winds Down

Published on December 1, 2025

For years, San Diego has been the golden child of California tourism. With its near-perfect weather, world-class zoo, and endless beaches, “America’s Finest City” has enjoyed a post-pandemic boom that seemed unstoppable. However, as the sun sets on 2025, a different picture is emerging—one that has industry leaders taking a cautious step back.

Recent data reveals a noticeable slowdown in San Diego’s tourism sector, specifically in hotel performance. Occupancy rates have dipped, and the frantic demand that characterized the last few years is softening. While the city remains a top-tier destination, the current trends serve as a “warning sign” for what might lie ahead in 2026.

The Numbers: A Dip in Demand

According to recent reports from the San Diego Union-Tribune and industry analysts, the momentum that carried San Diego through early 2025 has started to wane.

While the city maintained strong occupancy rates of around 72.9% through September—outperforming many other California markets—the trend line is flattening. The once-reliable leisure traveler, who flocked to the coast for “revenge travel” vacations, is pulling back. Rising costs, economic uncertainty, and a shift toward budget-conscious travel (like cruises or short-term rentals) are chipping away at hotel bookings.

November 2025 data indicates a further cooling. Weekday business travel and government-related stays have softened, and the explosive growth in room rates (ADR) seen earlier in the year has leveled off. The forecast for the remainder of the year suggests negative RevPAR (Revenue Per Available Room) growth, a key indicator that hotels are earning less from each room than they were previously.

The “Gaylord Effect” and Supply Issues

One major factor influencing these numbers is a significant increase in supply. May 2025 saw the grand opening of the massive Gaylord Pacific Resort and Convention Center in Chula Vista. With 1,600 rooms, this mega-resort instantly expanded the region’s capacity.

While a boon for the convention market, adding such a large volume of inventory means the “pie” of visitors is being sliced thinner. Existing hotels are now competing harder to fill their rooms, diluting occupancy percentages across the board. With nine more hotels totaling 1,300 rooms currently under construction, the supply-demand balance will remain a critical challenge through 2027.

The Economic Headwinds

The slowdown isn’t happening in a vacuum. Broader economic pressures are weighing on the average American traveler.

• Inflation & Costs: San Diego is not a cheap destination. With hotel rates averaging over $177 per night earlier in the year, families are feeling the pinch. Dining, gas, and attraction tickets add up, making alternative, lower-cost destinations (or staycations) more attractive.
• Global Uncertainty: Potential tariffs and trade tensions have created a ripple of caution. International travel, while recovering, hasn’t bounced back fully to pre-pandemic levels to fill the gap left by domestic softening.

Leadership in Transition

This shifting landscape comes at a time of leadership transition for the San Diego Tourism Authority (SDTA). Julie Coker, the dynamic CEO who steered the organization through the pandemic recovery, has announced her departure to lead NYC Tourism + Conventions.

Under Coker, San Diego achieved record-high returns on advertising spend and solidified its reputation as a premier meeting destination. Her successor will face the difficult task of navigating this new “shoulder season” of economic cooling, needing to find creative ways to market the city beyond just “sun and sand” to keep visitor numbers healthy.

The Silver Lining: Conventions and Culture

It’s not all gloom. The convention sector remains a bright spot. The Gaylord Pacific is attracting groups that previously might have bypassed San Diego for larger venues in Vegas or Orlando. The city’s life sciences and biotech sectors continue to drive steady business travel, providing a floor that prevents a total freefall.

Moreover, San Diego is doubling down on its cultural assets. By promoting itself as a cross-border cultural hub (thanks to its proximity to Tijuana) and a world design capital, the city hopes to attract a more resilient, high-value traveler who is less sensitive to price fluctuations.

The Outlook for 2026

As 2026 approaches, the strategy is shifting from “growth at all costs” to “value retention.” Hotels may need to adjust pricing expectations, and marketing campaigns will likely focus heavily on regional “drive markets”—convincing residents of Los Angeles, Phoenix, and Las Vegas that a weekend in San Diego is still worth the drive.

The warning sign has been lit. Whether it turns into a full-blown detour or just a speed bump depends on how agile the city—and its tourism businesses—can be in the months to come.