Southern California Hotel Market Surges: 3,500+ New Rooms in 2025

Introduction to the Surge in Southern California’s Hotel Market

In 2025, Southern California’s hotel market experienced a remarkable rebound, with new hotel room deliveries soaring by 128% year-over-year. This surge reflects the completion of several large-scale projects, even as broader industry challenges continued to restrict new construction starts throughout California. The findings from the Atlas Hospitality Group highlight a regional disparity in hotel growth, spotlighting Southern California’s significant contribution amidst a statewide growth of 43%, marked by the openings of 50 hotels totaling 7,100 rooms.

Leading the Charge: San Diego County’s Growth

San Diego County emerged as the frontrunner, with five new hotels adding a total of 2,034 rooms in 2025. This growth was starkly contrasted by the single hotel with 179 rooms opened in 2024. A significant portion of this expansion can be attributed to the 1,600-room Gaylord Pacific Resort in Chula Vista, which marked the largest hotel opening in the state. This trend underscores how a handful of major projects can drastically elevate overall statistics, even in the face of more subdued performance in smaller markets.

Los Angeles County’s Steady Progress

Los Angeles County kept pace with the growth trajectory by delivering seven hotels that accounted for 788 new rooms, a notable increase from five hotels and 607 rooms in 2024. The county’s most significant 2025 opening was the 194-room AC Hotel Pasadena. The construction pipeline remains robust, with 18 hotels totaling 2,172 rooms currently underway. Notably, Los Angeles County leads California in the planning pipeline, with 138 hotels and 20,557 rooms waiting in the wings, indicating strong ongoing interest and potential future growth.

Riverside and San Bernardino Counties Find Their Footing

Riverside County maintained its momentum with four hotels totaling 405 rooms opened in 2025, demonstrating stability compared to the previous year. The largest opening was the 120-room Everhome Suites in Temecula. Six additional hotels, led by the 250-room Hotel Indigo Coachella, are under construction, while the planning pipeline reflects 126 hotels with 14,365 rooms being considered.

Simultaneously, San Bernardino County also saw an uptick, with four hotel openings totaling 429 rooms compared to just two hotels with 224 rooms in 2024. The 125-room Courtyard Loma Linda was the largest of these new openings. The county currently has ten hotels under construction, including the 146-room Hyatt Place Ontario, contributing to a planning pipeline of 50 hotels with 4,735 rooms, up from the previous year.

Orange County’s Decline in Development

In contrast, Orange County exhibited a conspicuous cooling trend, reporting only one hotel with 91 rooms delivered in 2025—down from two hotels with a total of 298 rooms in 2024. The solitary addition, the La Quinta Inn & Suites in La Habra, illustrates this downturn. Despite three hotels totaling 234 rooms currently under construction, the planning pipeline reveals a decrease, now totaling 67 hotels with 10,401 rooms planned.

Statewide Trends: A Cautious Development Climate

On a broader scale, California’s hotel market illustrates a disciplined development climate, with 96 hotels under construction and 11,121 rooms in progress. However, new planning efforts have diminished significantly, with 1,120 hotels and 140,526 rooms currently in the pipeline—a decline from prior years. This mixed picture of rising completions paired with shrinking pipelines suggests a cautious approach among developers, driven by financing constraints and escalating construction costs.

The dynamic between increased completions and reduced new starts emphasizes a replacement-cost focus within the industry. While some significant projects undertaken during better economic times are now being completed, the current climate has tempered investment enthusiasm for new ventures. Consequently, developers and investors are focusing on acquiring existing assets at prices that are more appealing than the elevated replacement costs, particularly as larger-scale projects fortify market viability without triggering a new wave of construction.

Conclusion: Navigating the Future of Hotel Development in California

The future of Southern California’s hotel market rests on a precarious balance between completing existing projects and cautious financing strategies that characterize the current construction climate. The dramatic rise in new openings, notably led by Southern California, exemplifies a response to demand, yet also highlights the complexities of market dynamics in a post-pandemic world. As the region navigates a cautious development landscape, stakeholders must remain agile and focused on strategic investments to optimize long-term growth potential. This evolving narrative will define how California’s hotel market adapts to changing economic conditions, signaling an era of both opportunity and caution for developers and investors alike.