Hotel occupancy surpasses 2019 average but jobs decline in leisure and hospitality sector

The City of San Francisco held a meeting on July 4, 2025, focusing on the current state and future projections of the local economy, particularly in the low-wage service sector, including leisure and hospitality.

The discussion began with concerns regarding the decline of low-wage services, emphasizing the impact on the hotel industry, which is a significant driver of the local economy. A representative noted that hotel occupancy rates have recently surpassed pre-pandemic levels, reaching over 80% for the first time since 2019, largely due to events like the RSA conference, which attracted approximately 26,000 attendees. This resurgence in hotel occupancy is seen as a positive indicator for the tourism sector.

Despite the encouraging signs in hotel occupancy and a strong leisure market, which has seen international travel return to 60% of pre-pandemic levels and domestic travel at 80%, the meeting highlighted a troubling reality: the sector has lost over 30,000 jobs. This job loss extends beyond hotels to restaurants and retail, with few new businesses emerging to replace those that have closed.

The representative expressed concern that while tourism numbers may recover, the lasting damage to the low-wage service sector could hinder overall economic recovery. The lack of new business formation in retail and personal services was noted as a significant issue, indicating that the city may face ongoing challenges even as visitor numbers improve.

In conclusion, the meeting underscored the importance of a robust tourism sector for San Francisco's economy while acknowledging the substantial hurdles that remain in revitalizing the low-wage service industry. The discussions highlighted the need for strategic planning to address job losses and support new business development in the city.