Hotel Room Rates at Lowest Levels in Twenty Years

Here's a quick snapshot of the business climate in San Francisco. The average daily rate for San Francsico hotel rooms is at its lowest level (in inflation-adjusted terms) in twenty years.

Note: I've used the Consumer Price Index to convert historical room rates to 2010 dollars.

Occupancy rates have actually been running well above average. In that kind of environment, room rates usually rise quickly. My guess is that the mix of hotel guests has changed during the recession, with price-sensitive tourists replacing high-paying business travelers. If so, then San Francisco's business climate is soft indeed.