Don't Leave Your Heart--or an Automobile--in San Francisco
THURSDAY, AUGUST 26, 2021 --
San Francisco has always been a whirling dervish of a city. But pummeled endlessly by media reports of the city's spike in crime, filth and homelessness, wary visitors are now staying away in droves.
Other major American cities have rebounded thanks to this summer's upswing in leisure travel, but San Francisco and nearby San Mateo lag the nation's major markets in hotel occupancy. According to STR, the lodging statisticians, San Francisco in July was 12 points below the national average and had the country's steepest occupancy drop compared to July, 2019.
San Francisco has been through cycles before--a gold rush, earthquakes, fires, the hippie movement, financial meltdowns, tech booms--but this has been an epic decline. Still, don't count the City by the Bay out.
"San Francisco has historically been 33% leisure travel, 33% [independent] business travel and 33% group and convention travel," says Rick Swig, president of RSBA, a hospitality consultancy. But when economics get out of balance, the city "falls harder than other markets." He notes that the pandemic has wiped out independent business and conference travel and decimated international travel from Asia and Europe.
"Typically, it takes three years after an economic down for business and group/convention travel to recover," adds Swig. "I just thank God I don't own a 1,000-room hotel in San Francisco. Those guys will be in pain for a long time."
Still, three San Francisco hotels recently sold "at prices that are nothing short of amazing," says Alan X. Reay, the president of California hotel broker Atlas Hospitality Group. One example: the 360-room Le Meridien in the financial district, which once was the Park Hyatt San Francisco. It sold for $221 million or nearly $615,000 a room. "These hotel values defy logic," Reay adds.
The high sales prices "show that investors see this downturn as a temporary thing," explains Dennis Gemberling, president of Perry Group International, another hotel consultancy. But he also rings an alarm. "The condition of the streets, the homelessness and rising crime has caused a lot of convention planners to rethink San Francisco which, like New York City, is a very expensive place to do business."
And therein lies the problem: Headline-grabbing high costs of housing and office space twinned with the crime and homeless encampments have sent the city's corporate headquarters packing. Typical among the defections is financial services giant Charles Schwab. It decamped from downtown San Francisco to Westlake, Texas. And the mayor of Miami recently rented a San Francisco billboard to hawk the Florida city's charms to Bay Area companies and residents.
Just before the pandemic crashed down on us last year, I insisted that I'd never move from this one-time Bohemian town. After all, I love the weather, am close to San Francisco International and live and work in great, affordable spaces.
Now I am not so sure.
During one recent week, my office building in the normally quiet Upper Fillmore district in upmarket Pacific Heights was broken into twice. (Thankfully, my personal office was not burgled.) The day after the first office break-in, the back window of my car was smashed just three blocks from my office. The insides were ransacked even though nothing was visible in the vehicle.
The next day, a woman walking in the neighborhood reported that a hooded bandido came up to her in broad daylight, snatched a mobile phone from her hand and sprinted off. One day later, a professional photographer was robbed at gunpoint and his cameras stolen. Even locked garages are being broken into by thieves in search of expensive bicycles.
"Crime, particularly auto burglaries, is up citywide during the Covid pandemic because there are fewer visitors to target," a desk officer at the San Francisco Police Department's Northern Station said. "Since tourism is down, they're looking to locals or anyone for theft opportunities."
The situation is so dire that the insurance company GEICO now has a separate claims department for broken auto glass. Safelite AutoGlass, used by many insurers in San Francisco to replace windshields and windows, works on 15 vandalized cars a day, a Safelite technician told me.
If you're driving a car in San Francisco--or anywhere in the Bay Area for that matter--make certain you don't leave even as much as file folder inside. Definitely no luggage, equipment or samples in your trunk.
"If you have out-of-state license plates or you are driving a rent-a-car, you tend to be more of a target for thieves," the Safelite tech also told me.
Which, of course, doesn't make you want to leave your heart--or an automobile--in San Francisco.
Other major American cities have rebounded thanks to this summer's upswing in leisure travel, but San Francisco and nearby San Mateo lag the nation's major markets in hotel occupancy. According to STR, the lodging statisticians, San Francisco in July was 12 points below the national average and had the country's steepest occupancy drop compared to July, 2019.
San Francisco has been through cycles before--a gold rush, earthquakes, fires, the hippie movement, financial meltdowns, tech booms--but this has been an epic decline. Still, don't count the City by the Bay out.
"San Francisco has historically been 33% leisure travel, 33% [independent] business travel and 33% group and convention travel," says Rick Swig, president of RSBA, a hospitality consultancy. But when economics get out of balance, the city "falls harder than other markets." He notes that the pandemic has wiped out independent business and conference travel and decimated international travel from Asia and Europe.
"Typically, it takes three years after an economic down for business and group/convention travel to recover," adds Swig. "I just thank God I don't own a 1,000-room hotel in San Francisco. Those guys will be in pain for a long time."
Still, three San Francisco hotels recently sold "at prices that are nothing short of amazing," says Alan X. Reay, the president of California hotel broker Atlas Hospitality Group. One example: the 360-room Le Meridien in the financial district, which once was the Park Hyatt San Francisco. It sold for $221 million or nearly $615,000 a room. "These hotel values defy logic," Reay adds.
The high sales prices "show that investors see this downturn as a temporary thing," explains Dennis Gemberling, president of Perry Group International, another hotel consultancy. But he also rings an alarm. "The condition of the streets, the homelessness and rising crime has caused a lot of convention planners to rethink San Francisco which, like New York City, is a very expensive place to do business."
And therein lies the problem: Headline-grabbing high costs of housing and office space twinned with the crime and homeless encampments have sent the city's corporate headquarters packing. Typical among the defections is financial services giant Charles Schwab. It decamped from downtown San Francisco to Westlake, Texas. And the mayor of Miami recently rented a San Francisco billboard to hawk the Florida city's charms to Bay Area companies and residents.
Just before the pandemic crashed down on us last year, I insisted that I'd never move from this one-time Bohemian town. After all, I love the weather, am close to San Francisco International and live and work in great, affordable spaces.
Now I am not so sure.
During one recent week, my office building in the normally quiet Upper Fillmore district in upmarket Pacific Heights was broken into twice. (Thankfully, my personal office was not burgled.) The day after the first office break-in, the back window of my car was smashed just three blocks from my office. The insides were ransacked even though nothing was visible in the vehicle.
The next day, a woman walking in the neighborhood reported that a hooded bandido came up to her in broad daylight, snatched a mobile phone from her hand and sprinted off. One day later, a professional photographer was robbed at gunpoint and his cameras stolen. Even locked garages are being broken into by thieves in search of expensive bicycles.
"Crime, particularly auto burglaries, is up citywide during the Covid pandemic because there are fewer visitors to target," a desk officer at the San Francisco Police Department's Northern Station said. "Since tourism is down, they're looking to locals or anyone for theft opportunities."
The situation is so dire that the insurance company GEICO now has a separate claims department for broken auto glass. Safelite AutoGlass, used by many insurers in San Francisco to replace windshields and windows, works on 15 vandalized cars a day, a Safelite technician told me.
If you're driving a car in San Francisco--or anywhere in the Bay Area for that matter--make certain you don't leave even as much as file folder inside. Definitely no luggage, equipment or samples in your trunk.
"If you have out-of-state license plates or you are driving a rent-a-car, you tend to be more of a target for thieves," the Safelite tech also told me.
Which, of course, doesn't make you want to leave your heart--or an automobile--in San Francisco.