Hotels are leaving their debt in San Francisco
Convention business is drying up or moving to smaller cities. Meanwhile, layoffs have left entire floors of downtown buildings empty, San Francisco is left with pretty much only one thing in steady supply: hotels in default. No fewer than seven big properties have defaulted on their loans, including the splashy Four Seasons on Market Street, which opened in 2001 to great fanfare but now can't scrape up enough to meet its $90 million obligations.
It's a great time to hit the Bay Area. If you don't believe me, hit a site such as Better Bidding, where people report how cheap the hotels are selling for on Priceline. The Grand Hyatt is just $70, while the Hotel Nikko is $80 -- and both hotels are easily twice as much during a good year.
Hotels with fewer stars are going for even less, which means the average person can take advantage of the downturn to either save even more on a trip to San Francisco by staying in a drastically marked-down economy property (one Holiday Inn near the Civic Center has been going for $40), or by spending much less on a luxury room. San Francisco, once prohibitively expensive for some, is now friendly to the most modest budget.
Tourism experts say we haven't seen the bottom yet. Considering the city gets about 7% of its budget from tourist taxes, the pain will be felt more widely soon.