Overview:
Tourism in Coronado and along San Diego’s coastline is making a comeback after the industry shutdown in 2020, but it’s not quite returned to pre-pandemic levels. Tourism experts, hotel representatives and academic professionals share more about the changes and growth over the past few years – and how the current economy could impact the industry.
The Hotel del Coronado is nearing the completion of the final phase of its over $550 million development – a $160 million restoration of the Victorian building – right as The Lafayette’s sister hotel, The Baby Grand, a $17 million project, schedules its much anticipated opening in Coronado.
Across the street from the Del, The Bower – a luxury boutique hotel – opened its doors in March. The $41 million hotel is located at the former Japanese tea garden site of the John D. Spreckels Mansion and the Villa Capri.
Also slated for a major revamp is the Loews Coronado Bay Resort, which is in the process of rolling out a prospective $220 million renovation.
And anyone who heads down the Silver Strand can see the steady rise of the $1.3 billion Gaylord Pacific Resort and Convention Center, scheduled to open this month.
Indications are that tourism and hotel/resort development in Coronado and San Diego are making a comeback.
The San Diego Tourism Authority reports that in 2024 San Diego County sold 17.5 million hotel room nights, averaged 74.2% occupancy and a $212 average daily rate.
But is the demand meeting the new lodging supply? And will these hotels and resorts recuperate the money they are pouring into projects?
General manager of the Gaylord Pacific Resort and Convention Center, Scott Siebert, said he’s confident adding another resort to San Diego’s lineup is a smart financial decision.
“San Diego’s hospitality industry is booming – the city continues to grow and excite travelers each year…” Siebert said via email. “We don’t share return-on-investment or financial projections publicly, but what we can say is that Gaylord Pacific represents a long-term strategic investment in the region, and we’re confident in its strong future performance.”
The San Diego Tourism Authority reports that there are seven new hotel or resort properties slated to open in San Diego County in 2025 – the Gaylord Pacific, The Bower and the Baby Grand included. Those seven new lodgings make a combined total of 2,373 new rooms.
Since 2020, Coronado has had its peaks and valleys with tourism levels, according to Discover Coronado’s economic impact report. But Carl Winston, SDSU professor and director of the School of Hospitality and Tourism Management, said Coronado and San Diego have been outliers in the nation, bouncing back from the pandemic shutdowns sooner than other cities.
“The lodging industry, obviously, and tourism in general got wiped in COVID,” Winston explained. “San Diego made one of the strongest recoveries from that, but candidly, travel is still not back to where it was nationwide, pre-COVID.”
Coronado’s ongoing growth and evolution enticed J Street Hospitality. The president and founder, Sajan Hansji, is a Coronado local. He led the effort to develop The Bower on the island.
“Coronado has always been iconic, but it’s almost going through this kind of lift right now where the Del is opening Nobu,” The Bower general manager Sean Murphy said. “[The Del is] unveiling that renovation. We just opened. The Baby Grand’s about to open. Loews [is] doing the renovation next year. There’s so many things that are creating, that are just highlighting Coronado [as] more of an escape.”
Winston said the San Diego region’s recovery is in-part due to its prime location. It’s a beach city in a “drive market” – one that attracts tourists from driving distance.
“San Diego is unique in that we have Los Angeles, Phoenix [and] Las Vegas all within a reasonable drive,” Winston said.
The cross-border travel from Mexico also helped the tourism industry rebound, but not to pre-pandemic levels.
Linchi Kwok, professor at the Collins College of Hospitality Management at California State Polytechnic University Pomona (Cal Poly Pomona), said drive-distance tourists are key to recuperating losses from the pandemic and building toward the future.
“I think for local business we have to work harder to meet the local business,” Kwok said. “I think that’s easier to reach.”
Kwok, Winston and other professionals said a few metrics are key to understanding the current state of the tourism industry: occupancy, room rate and return on investment.
Occupancy
Occupancy in Coronado bottomed out during 2020, dropping off to 38.1% percent of the share of room nights on the island. Occupancy is the ratio of occupied rooms to the total amount of rooms that are available. In the year prior, occupancy was at 73.3% in Coronado.
In the last few years, occupancy rate has made its comeback. Last year, it hit its highest peak since 2020 at around 67% occupancy.
When looking at this comeback, Winston said it’s important to note that lodging and tourism comprise a trailing economic indicator: When the economy does well, people spend money on travel and tourism, and when there’s difficult financial times, people spend less on travel.
While occupancy overall has steadily increased with the economic rebound up until 2025, group occupancy – gatherings for civic, social, work or religious functions – continue to struggle at hotels locally.
Group occupancy declined by 2.8 percentage points in Coronado in 2024, according to Discover Coronado’s economic impact report, though they still generated $122.2 million worth of economic activity in the city.
Kwok said group occupancy and international travel haven’t returned to their pre-pandemic levels.
“One thing we definitely noticed was, travel behavior had changed substantially after COVID,” Kwok said. “It’s really the group and business travelers who have not come back yet.”
Neither has international travel – something San Diego and Coronado rely on being so close to the border.
“Those tourists can’t afford to come here,” Winston said.
Daily rate
The average daily rate for a hotel room in Coronado in 2024 was $479.
“It’s never been that high before,” said Todd Little, Discover Coronado’s executive director, “So that’s really good news, obviously, for the resorts.”
That may sound like a high price, but there’s a reason why leadership in Coronado encourages high rates. The larger the price tag, the higher the return is on transient occupancy tax, which benefits the local community.
“As I think about the last five years, it’s kind of like the politicians finally figured out, ‘Wow, tourists pay for a lot of potholes and a lot of police,” Winston said. “It’s one of the top handful of tax revenue drivers. For the city of Coronado and the city of San Diego, [the top handful of tax revenue drivers] in the region is tourists.”
The tourism industry in San Diego generates more than $1 billion annually in state and local transient occupancy, sales and property taxes, according to the San Diego Tourism Authority.
But it’s a delicate dance. If you raise the rates too high, will the people continue to pay the rate? If you raise the taxes too high, will the hotel be able to keep up?
“If you were to talk to a hotel owner today in Coronado or San Diego, they’d say they’re going to shoot themselves in the foot when they raise these wages and taxes too high on the hoteliers because their tax collections are going to go down,” Winston said.
This year, San Diego Mayor Todd Gloria released a draft Fiscal Year 2026 budget, which projects a $258 million deficit. The deficit had been anticipated in part due to a decline in the hotel room and sales taxes.
At the March 18 Coronado City Council meeting, the council approved Discover Coronado’s plan to continue levying assessments from the Hotel Del, Marriott, Loews, and Glorietta Bay Inn, collecting a total of $2.2 million from those four hotels.
The transient occupancy tax (TOT) is set at 10%.
“The tax is used by the City Council for public safety costs, for the library, for grants to local organizations, for community arts – so many different things,” Little said.
Return On Investment (ROI)
Winston said hotels are considered risky investments.
Establishments like the Del and Loews are spending on multi-million dollar renovations – and he and Kwok believe the timing is right.
Kwok explained that most hotels are required to do a renovation by their franchiser. They have to reserve a certain amount of revenue and spend it on what are called property improvement plans (PIPs).
“Hotels are expected to spend money from PIPs to upkeep the hotel, such as replacing bedding, restaurant bars, etc. for every 5 – 7 years, new tiles and bathrooms for every 10 or more years, and HVAC and plumbing systems for about 20 years (or as needed),” Kwok said.
So, the timing given our current market conditions is great for these renovations, although Winston said that it’s coincidental they’re either completing or getting started at this moment. These projects take a long-term planning and approvals process.
“When the business is slow, it is a great time to do renovations,” Kwok said. “Then, the property is ready to shine and respond to a higher demand when the market gets better.”
Coronado’s reputation as a longtime tourism destination helps with more promising prospects for return on investment.
“There’s another factor that Coronado has, that La Jolla has, that Del Mar has, but that El Cajon doesn’t have,” Winston said. “There’s barriers to entry; nobody else has built a big hotel in Coronado ever. So, it’s a pretty safe investment in many regards.”
The Loews Coronado Bay Resort and Hotel del Coronado declined to comment on their renovations. The Bower and Gaylord Pacific declined to disclose their investments and projected return on investment. Representatives at The Bower noted that they invested $41 million in the property.
What’s happening now and what’s in store for the future?
Although these developments and renovations could bring tourism growth, the industry is now facing a few challenges.
The start of 2025 tourism in Coronado has been a bit slower than in years past, according to Discover Coronado.
“Occupancy was 43% and that’s down 27%,” Little said.
And he said that’s not due to local factors that some might assume, like beach closures amid the Tijuana River sewage crisis.
He said that drop occurred because a number of hotels (especially the Hotel Del) are still under renovation/restoration.
“There weren’t rooms to rent, so occupancy would actually be down,” Little said. “I do think that also inflation is playing a role in decision making.”
The Trump administration’s impact
The Trump Administration’s economic and immigration policies have left many wondering what the future holds. Kwok, Little and Winston said it’s too soon to say how policy changes could impact the tourism and hospitality industry.
Both Kwok and Winston said they have not heard of instances where hoteliers are losing staff who are migrant workers or immigrants due to the revocation of green cards or working status, but President Donald Trump mentioned a vague plan for undocumented hotel workers in a Cabinet meeting on April 10.
Regarding the current economic state, Kwok and Winston said they are hopeful the industry will persevere.
“We have always been a very resilient market,” Kwok said. “We go through the COVID. We go through 9/11 and we bounce back quickly. We will be doing okay in the long term. We just have to hold on to what we are doing now and try to do our best.”
How local hotels are making their mark on the tourism landscape
The two newest hotels/resorts to the region, the Bower and Gaylord Pacific, represent very different approaches to the lodging business. However, both aim to serve a niche in San Diego county.
The Gaylord Pacific aims to target group and convention visitors in an unsaturated lodging market – Chula Vista.
“Chula Vista offers something truly unique: an expansive waterfront canvas with room to build not just a resort, but a destination,” Siebert said. “We saw an opportunity to be part of a long-term vision that blends hospitality, public access, and economic development — right on San Diego Bay, in a growing, vibrant part of the region.”
Their plan is to help establish the region as a meeting destination for business and group travel. The resort has more than 477,000 square feet of event space.
“We are actively collaborating with local entrepreneurs and purveyors, keeping them informed of large group bookings to facilitate necessary expansion and meet the increasing demand,” Siebert said. “Furthermore, this increased visitation is expected to encourage greater city investment in the local Chula Vista area, incentivizing our guests to explore and support the surrounding community rather than traveling outside the immediate vicinity.”
“Looking ahead, we’d love to see continued investment in infrastructure, hospitality talent and diverse experiences that make this region even more attractive—not just to tourists, but to planners, companies and organizations from around the world,” Siebert said.
Siebert said 99% of the hourly resort employees are from San Diego.
“Investing in the local economy is a cornerstone of Gaylord Pacific Resort & Convention Center’s mission,” he added. “We’ve been able to put together this resort with the support of the local community, and we’re able to say thank you directly by putting a focus on stimulating the local economy. The choice to pursue Gaylord Pacific Resort & Convention Center represents a significant long-term investment in the region’s tourism and hospitality economy.”
In addition to the business and group accommodations, the resort also invested in a series of family fun spaces, including a 4.25-acre poolside paradise with wave pools, water slides, kids zone and more.
The Bower’s approach to the Coronado market focuses on hyper-personalized luxury. The hotel has a “living room” instead of a lobby and front desk. Each guest has a “host” who greets them and accommodates their needs throughout the stay.
The Bower embraces the opulence and nostalgia of the island. The Bower targets returning Coronado tourists and also aims to connect with the driving target market that Kwok and Winston have mentioned.
“You get your car here and that’s it,” Murphy said. “You don’t have to leave. You’re across the street from the beach. You’re on Orange Avenue, dozens of restaurants and dozens of shops here, two blocks from the marina, you can take a yacht out… I think Coronado is going to be out there so much that people are going to scratch their heads and say maybe we should go down and see what’s going on down there.”
The Bower is also part of a broader effort to invest in the local community. Murphy said he views The Dive, a rooftop bar, as a local gathering place. The decorations and energy of the bar are a departure from the design of the rest of the hotel.
“There’s intentionality behind that,” he added. “It’s because of the storied past that we’re paying homage to, not only including that Japanese tea garden, but it also includes the Villa Capri, late ‘50s Hollywood kind of roadside.
He also said he hopes the hotel will facilitate connections within the Coronado community and among other tourism establishments.
“I think we need to do a better job at connecting with each other,” Murphy said. “I do think for folks like Bower, and folks like Baby Grand, I think partnerships between the restaurant staples, like Little Frenchie, I think will be huge.”
Like the Gaylord Pacific, The Bower is making efforts to reinvest in the local community. Within their resort fees, they donate a portion to the Emerald Keepers, which is a local ocean conservation.
When looking at Coronado’s tourism and lodging future, Winston predicted the town will continue to increase in value even in difficult economic times.
“There’s a lot of swirling forces here, but what you don’t have is you’re never going to be as vulnerable to the most cyclical markets in our competitive set, meaning cities that we compete for tourists against,” Winston said. “The two most volatile are Phoenix and Las Vegas.”
He said those cities have a huge problem that Coronado does not. If Las Vegas or Phoenix boom in the next two years, developers could come in and build new hotels (making the competition more high stakes). There is no vacant land in Coronado. And, because of the city’s reputation as a tourist destination, it can rise above local competitive noise.
“You guys kind of have a jewel there,” Winston said. “I think that’s kind of the happy ending to your story, from my point of view.”
