California Hotel Sales in 2025 Show Mixed Results

North Bay region sees sharp decline in transactions despite statewide improvement

Published on Feb. 11, 2026

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A new report from real estate brokerage Atlas Hospitality Group shows that while hotel sales throughout California improved by 4.4% in 2025, the North Bay region experienced a steep decline in transactions. Only three of the six North Bay counties reported hotel sales, marking a significant drop from the previous year. The report cites ongoing market pressures, including disagreements between buyers and sellers on pricing, as well as the impact of rising interest rates and operating expenses.

Why it matters

The mixed results in California's hotel sales market reflect the broader economic challenges facing the hospitality industry, particularly in regions like the North Bay that have been impacted by factors like the pandemic and changing consumer preferences. The data provides insights into the health of the state's tourism and travel sectors, which are critical components of the overall economy.

The details

According to the Atlas Hospitality Group report, there were only six hotel sales in the North Bay region in 2025, down from 23 the previous year. Sonoma County saw the most activity, with four transactions, but this was a 67% decline from 2024. The largest sale in the North Bay was the 12-room Plaza Healdsburg Inn, which sold for $8.2 million. In contrast, statewide hotel sales totaled $4.095 billion, up 4.4% from the previous year. Standout deals included the $265.5 million sale of the 1,919-room Hilton San Francisco Union Square and the $111 million sale of the 340-room Embassy Suites in La Jolla.

  • In the first half of 2023, sales of California hotel properties had fallen more than 53% compared to the previous year.
  • In 2025, there were six hotel sales in the North Bay, double the three hotels sold in August, but a year-over-year decline from the 23 hotels sold in 2024.

The players

Atlas Hospitality Group

A real estate brokerage that tracks the hotel industry in California and produces regular reports on hotel sales and development.

Alan X. Reay

The president of Atlas Hospitality Group, who provided analysis and insights on the state of the California hotel market.

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What they’re saying

“Deal-making stayed difficult as financing costs, operating expense pressure (labor and insurance), and seller price resistance kept transactions from normalizing.”

— Alan X. Reay, President, Atlas Hospitality Group (pressdemocrat.com)

“(Otherwise) 2026 is likely to remain a selective, price-sensitive market with liquidity concentrated in well-positioned opportunities rather than broad-based recovery.”

— Alan X. Reay, President, Atlas Hospitality Group (pressdemocrat.com)

What’s next

In order for hotel sales to improve in 2026, Reay said that debt conditions must ease and cash-flow visibility must improve, allowing industry businesses to operate and plan effectively with real-time data rather than outdated information.

The takeaway

The mixed results in California's hotel sales market highlight the ongoing challenges facing the hospitality industry, particularly in regions like the North Bay that have been disproportionately impacted by factors like the pandemic and changing consumer preferences. While statewide sales showed some improvement, the steep decline in transactions in the North Bay underscores the need for targeted support and strategies to help the region's hotels and tourism-related businesses weather the current market pressures.