Another hotel is being returned to its lender in San Francisco in the latest sign of distress for the city's tourism market.
An affiliate of DiNapoli Capital Partners is surrendering Kimpton Alton Hotel in Fisherman’s Wharf after failing to pay back an $85 million loan on the property, according to documents filed with San Francisco County.
The Fisherman’s Wharf neighborhood is one of San Francisco's top hospitality destinations with 150,000 rooms across 140 properties, according to CoStar data.
San Francisco has been one of the hardest hit tourism markets in the wake of the COVID-19 pandemic, in part due to the city's reliance on the international visitors that typically account for 60% of overnight visitor spending, according to a 2023 report by SF Travel. Visitors from China represent 20% of international travel, and those levels remain less than half of what they were before the pandemic.
Prior to the pandemic, San Francisco hotels were roughly 80% occupied with average daily rates of $250, among the highest metrics in the United States, according to STR data. Today, San Francisco's hotel market aligns with the national average after seeing one of the sharpest declines in the United States during the pandemic, according to CoStar data.
The city's average occupancy is 58% with average rates of $200, similar to the rest of the country.
International travel to the U.S. is expected to return to pre-pandemic levels in 2026, according to CoStar data.
City in Recovery
DiNapoli took out the loan on the hotel two years ago from an affiliate of AB CarVal, a Minneapolis-based investment firm that has taken over ownership of the property. Crestline Hotels and Resorts, a third-party hospitality service provider, will now manage the hotel.
DiNapoli, AB CarVal, and Crestline did not respond to requests to comment from CoStar News.
DiNapoli acquired the 248-key property for $44.8 million in 2018 as a Holiday Inn. It rebranded the hotel into a Kimpton Alton, an international company that operates a chain of 81 high-end hotels across the globe, with more under development.
The building at 2700 Jones St. is not the only San Francisco hotel to face financial trouble over the past year. Two hotels totaling 3,000 rooms — the Hilton San Francisco Union Square and Parc 55 — are in receivership, and the 544-key Hilton San Francisco Financial District has defaulted on its loan.
“Because of the lost demand and high hotel rates, plus being in a union-dominated market, it's hard for hotels to be near previous operating results and now have higher debt payments due to higher interest rates,” said Emmy Hise, senior director of hospitality analytics at CoStar Group.
San Francisco could rebound soon, according to tourism spending and convention center bookings that have risen since 2020, according to CoStar. The city also announced recently that additional flights will resume from China to San Francisco as the country continues to ease travel restrictions.
San Francisco tourism also stands to benefit from several Bay Area sporting events including hosting the 2025 NBA All Star game at Chase Center, being one of the 2026 FIFA World Cup host cities and from nearby Santa Clara holding the Super Bowl in 2026, according to Hise.