Number of hotel rooms increasing in SB, SLO counties

By Kenneth Harwood

The number of hotel rooms in Santa Barbara, San Luis Obispo and Ventura counties grew by 917 in the five years from January 2012 to January 2017, a net increase of 4 percent, but the rates of growth differed in the three coastal counties.

Santa Barbara County continued to offer the most rooms, followed by San Luis Obispo and Ventura counties, but the greatest growth in both number of rooms and percent gain was in San Luis Obispo County. Ventura County had fewer rooms in 2017 than in 2012, and a negative growth of 1 percent in number of rooms.

Growth of 4 percent in the three counties was the same as the rate in Santa Barbara County. Rate of growth in San Luis Obispo County was 8 percent, double the average rate of the three counties.

Supply of rooms in 2017 is slightly outpacing demand for rooms in both the tri-county area and the nation. Growth in number of rooms follows years of historically low interest rates for owners. Hotel occupancy rates are beginning to fall, thus pressing down room rates, revenue per available room, and profits.

Changes such as these are typical of years-long business cycles in many industries. If demand for rooms is smaller than supply, it seems likely that growth in number of rooms will slow until demand is greater than supply. Then we can expect the increase in number of rooms to resume.

To read the census of rooms by STR Hotel Research, go online to and click on Research. An example of recent declining room occupancy rate is also online at STR: US hotel results for week ending 18 March.

Dr. Kenneth Harwood is the economist for the Solvang Chamber of Commerce.