As any denizen of the city knows, San Francisco has quickly become one of America’s luxury epicenters. The city boasts some of the most expensive dining tabs in the country, and is one of the most sought-after locales for ultra-rich real estate buyers. Now, the city by the bay has reached yet another benchmark: San Francisco now has the most expensive hotel prices in the world.
Incredibly, the average price for a San Francisco hotel room has jumped an astonishing 88% in just the past year to $397 a night, according to an index compiled by Bloomberg of the world’s top 100 financial centers. The little city that could pulled ahead of other historically haute locales like Geneva, Milan, Chicago and Milan, where prices range from $292 to $240 a night.
The city’s surging hotel prices are due to the Bay Area’s tech industry boom, and a mix of a humming job market and a lack of new hotel construction. The area’s developers are putting their focus on office and residential buildings, which can be priced more aggressively.
“The influx of tech companies into San Francisco has been tremendous, and with it this new emerging traveler, this millennial traveler, who is looking for downtown experiences,” said Chuck Pacioni, general manager at the San Francisco Marriott Marquis. “Many of them may travel for work to Silicon Valley, but instead of staying at a suburban hotel, they want to stay in the city for the culture and the experiences.”
Apartment rents have also experienced a surge in pricing. The average rent for an apartment in the San Francisco reached averaging $2,280 in the first quarter, twice the national average, according to research firm Reis Inc.
On the other side of the coin, rent prices in cities like New York City, Paris and Budapest suffered steep declines, while Chicago, Milan and Kuala Lumpur all enjoyed increases in rates.