No room at the inn?
It’s not your imagination. Downtown Sonoma is chock-a-block with tourists. Local hotels are boasting 80-to-100% occupancy rates.
“The past few months have been some of the best in the MacArthur Place’s 20-year history with record average daily rates and record-breaking occupancies consistently over 80%,” said Chad Parson, CEO of Lat33 Capital (formerly IMH Financial), which has owned MacArthur Place since 2017.
Lodge at Sonoma General Manager Chris Wingerberg described business as “strong and very comparable to 2019.”
Across town at El Pueblo Inn, General Manager Aranda Tines told the Index-Tribune the hotel has been booked solid since June, including most weekdays — something the staff there can’t remember ever experiencing before.
Up Highway 12, Michele Heston of the Fairmont Sonoma Mission Inn described occupancy levels as “very strong (mirroring 2019 levels) due in part to a recent resurgence in weddings and family reunions.”
Local hoteliers are counting their blessings, but they know their good fortune could change overnight. Increased COVID restrictions, wildfires, smoky air — they have been through it all before.
“One thing these past three years have taught me in Sonoma Valley is that the universe likes to throw us curveballs — the fires, smoke, (Public Safety Power Shutoffs), and pandemic and economic issues have really changed a lot of patterns,” said Tim Zahner, director of the Sonoma Valley Visitors Bureau.
It’s certainly a “roller coaster ride” for demand, said Heston.
More than 200 new hotel rooms proposed for the Valley
In Sonoma, Marin, Napa and Solano counties, 83 hotels are in various planning stages, according to data compiled by Atlas Hospitality Group. That includes five projects with 537 rooms under construction in the North Bay.
Atlas President Alan X. Reay told the North Bay Business Journal in July then there are several factors behind the spike in future hotel planning activity.
“California hotels are enjoying record profits along with record revenues,” he said. “In addition, the trend by those buying existing hotels has pushed prices up to the point where it often makes more sense to build a new one. This growth is poised to occur despite increasing construction, labor and materials costs, as well as higher tariffs on furniture made in China favored by hoteliers.”
But a major new hotel hasn’t opened in Sonoma Valley in decades. And the only new hotel to open in the past five years was Michael Marino’s eight-unit Sonoma Bungalows on West Napa Street, which began greeting guests in early 2020.
"There’s currently a lot of demand and not a lot of supply of rooms,” said Zahner. “But it’s hard to say if we have too few or too many hotel rooms since that's decided by the people willing to take the risk to open one, but I am confident we could comfortably fill some more.”
Three major local projects are in various stages of the approval process, with the newest currently closest to the finish line.
The use permit for a 120-room hotel and affordable housing project at the former Paul’s Resort site across from Maxwell Park gained unanimous approval from the Sonoma County Planning Commission on July 15. The applicant, the Springs Investors Group, is a limited partnership led by local Best Western hotelier Norman Krug, 83.
The new three-story hotel would be 92,411 square feet and include a swimming pool, gym, meeting rooms, roof deck and 138 parking spaces. Construction could start on the project by late 2021.
Darius Anderson of Kenwood Investments (and managing partner of Sonoma Media Investments, owner of the Index-Tribune), meanwhile, first proposed his Hotel Sonoma Project in 2012. On hold since 2019, the project returned to the city’s Planning Commission on Aug. 12.
Anderson’s 62-room hotel and 80-seat restaurant proposed on West Napa Street, a half block from the Plaza, came before planning commissioners as part of a project study and scoping session, in an early-stage review of the latest incarnation of the hotel proposal.
Up Valley in Kenwood, the Yuciapa Companies, a Los Angeles-based private equity firm founded by billionaire Ron Burkle, has purchased 358 acres in Kenwood with plans to develop a resort at the base of Hood Mountain. The property, formerly owned by the Chinese developer Tohigh Property Investment, gained county approval for a 50-room hotel, spa and restaurant back in 2017 but has been dormant ever since.
If you built it, will they come?
Destination Analysts, a San Francisco-based market research firm, surveyed more than 1,200 American travelers in late July about their thoughts, feelings, perceptions and behaviors surrounding travel in the wake of the pandemic. The survey found an increase in the number of people stating they feel unsafe, nervous, worried or anxious about traveling.
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