Park Hotels & Resorts is extending its retrenchment in California's Bay Area by shutting one of its longtime properties near the newly rebranded San Francisco Bay Oakland International Airport.
The company notified the Port of Oakland that it will close the 360-room Hilton Oakland Airport in August after 56 years in business as the area's hospitality performance struggles to catch up to its pre-pandemic levels. Park Hotels & Resorts operates the property on land owned by the Port of Oakland.
“We understand that the hospitality sector continues to be negatively impacted by larger economic trends post-pandemic, and as the owner of this site, the port will be seeking the best use for this property moving forward,” a spokesperson for the port told CoStar News in an emailed statement.
Oakland's hotel occupancy stands at 63%, down from 77% in 2019, according to CoStar data, while the region’s average daily rate of $142 is off from $153 about five years ago. Across the bridge, San Francisco’s hospitality sector paints a similar picture with occupancy of 65% off nearly 20 percentage points from 2019.
The Hilton closing comes about a year after Park Hotels ceased making payments on a $725 million loan for two of San Francisco’s largest hotels — the 1,921-room Hilton San Francisco Union Square and the 1,024-room Parc 55 San Francisco — according to previous reporting by CoStar News.
“Now more than ever, we believe San Francisco’s path to recovery remains clouded and elongated by major challenges, both old and new: record-high office vacancies; concerns over street conditions; lower return to office than peer cities; and a weaker-than-expected citywide convention calendar through 2027,” Park Hotels Chairman and CEO Thomas J. Baltimore, Jr. said in a statement at the time.
The Port of Oakland is one of the largest container ship facilities in the United States, according to reports. It was established in 1927 and at one time was one of the busiest ports in the United States, but activity has declined in recent years due to import and export restrictions and community pushback over environmental concerns.
At the beginning of the COVID-19 pandemic, officials considered redeveloping the port into a mixed-used community centered around a new baseball stadium for the Oakland Athletics. Those talks dissolved when the A’s announced relocation efforts to Las Vegas last year.