San Diego Tourism Faces Stagnation as Post-Pandemic Boom Fades

Steve Pinard’s Action Sport Rentals normally does a relatively brisk business renting out paddleboards, Jet Skis and power boats to vacationers at his mission Bay locations, but given the grim numbers he has seen this year, he’s hoping to just break even in the coming year.

In a move to quickly juice end-of-year sales, Pinard offered a special promotion thanksgiving week of 20% off all rentals. And for next year, he expects he’ll have to launch promotions every holiday, something he says he’s never done before.

“This year, compared to 2024, I’m down about 17, 18%,” Pinard saeid of his six rental locations, including one at San Diego Bay. “There’s definitely fewer tourists, and they’re certainly not spending the money they used to. Even when the economy has been slow, there’s still been enough people from Arizona, Vegas coming down, but now it truly seems like they’re coming for just a weekend rather of a week or 10 days.”

“Regrettably, I’m expecting the same next year. I’m praying we’re flat. If I can do flat,that’s great.”

Action Sport Rentals’ flagging business is hardly an aberration. The bloom is off the rose of so-called revenge travel, which had fueled a meteoric rise in leisure trips as cooped-up Americans left their homes and started planning vacations once the pandemic waned.

More recently, though, growing uncertainty around the economy, on-again off-again tariffs, and rising expenses have dampened enthusiasm among businesses as well as the general public for dipping into their discretionary funds to pay for flights, hotels and dining out.

[Datawrapper Chart – Visitation to San Diego County]

A recently completed countywide forecast from the San Diego Tourism Authority, in partnership with the research firm Tourism Economics, reflects a marked slowing of growth – or an outright decline – in almost every metric, from overall visitation to hotel room revenue and occupancy rates. By the end of this year, a total of 32.8 million day and overnight visitors will have come to the county. That amounts to less than a 1% increase over 2024 and is still far off the peak visitation of 35.8 million in 2018.

For next year, the Tourism Authority anticipates little change in the number of out-of-town visitors to the county.

Especially distressing to hoteliers – and the businesses that rely on their guests – is the expected 2 percentage-point decline in hotel occupancy for 2025. It’s the first year since 2018, outside of the 2020 start of the pandemic, that the occupancy rate has fallen. The year-end average is expected to dip to 72%, which compares to the 2018 high of 78.5%. For 2026, the rate is forecast to decline further, to 71%.

That’s a marked change from the past few years when hotel stats like room revenue and daily rates were surging by double digits coming out of COVID and then normalizing to more modest increases of 2% to 3%.

“The big deal here is that San Diego has never experienced, with the exception of a big shock to the system like a financial crisis or the pandemic, an extended period of stagnation,” said Robert Gleason, president of Evans Hotels and chairman of the San Diego County Lodging Association. “And that’s where we are. We’re in a period of stagnation. Occupancy is declining, and occupancy drives employment.”

[Datawrapper Chart – San Diego Hotel Occupancy Rate]

As one of the top industry sectors in the San Diego economy, the tourism trade is said to employ about 1 in 8 workers, whi

Published: 2025/11/30 17:49:56

Economic Outlook: Cautious Optimism Amidst Uncertainty

Economic sentiment remains cautiously optimistic as of late November 2025, with experts acknowledging current challenges in business and consumer spending while anticipating a future shift in market conditions. While a definitive timeline for advancement remains unclear, there’s a general expectation that the current economic state is not permanent.

Current Economic landscape

Recent analysis indicates a period of uncertainty impacting both business investment and consumer behaviour. Several factors contribute to this cautious outlook, including persistent inflation, though it has been moderating, and interest rate policies implemented by the Federal Reserve to combat it. These factors are influencing spending decisions across the board.

Business Spending

Businesses are adopting a more conservative approach to capital expenditures. Uncertainty surrounding future demand and the cost of borrowing are leading companies to delay or scale back investment plans. this hesitancy is especially noticeable in sectors sensitive to interest rate fluctuations, such as housing and durable goods. Companies are prioritizing efficiency and cost control over expansion.

Consumer Spending

consumer spending, a major driver of the U.S. economy, is also showing signs of moderation. While the labour market remains relatively strong, with a unemployment rate of 3.7% as of November 2025, rising prices and higher interest rates are squeezing household budgets. Consumers are becoming more selective in their purchases, focusing on essential goods and services and reducing discretionary spending. Retail sales data reflects this trend, showing slower growth compared to previous years.

Looking Ahead: Anticipating a Shift

Despite the current challenges, there is a prevailing belief that the current economic conditions will not persist indefinitely. Experts are closely monitoring key economic indicators, including inflation, interest rates, and employment figures, to identify potential turning points.The timing of a significant shift in market conditions remains uncertain, but several potential catalysts could trigger a more positive outlook.

Potential Catalysts for Improvement

• Easing Inflation: A sustained decline in inflation would alleviate pressure on household budgets and perhaps lead to lower interest rates.
• Federal Reserve Policy: A shift in the Federal Reserve’s monetary policy, such as a pause or reduction in interest rate hikes, could stimulate business investment and consumer spending.
• Global Economic Growth: Improved economic conditions in major global economies could boost demand for U.S. exports and support domestic growth.
• Technological Innovation: Breakthroughs in technology and increased productivity could drive economic expansion.

Key Takeaways

• the U.S. economy is currently characterized by cautious optimism amidst uncertainty.
• Business spending is being restrained by higher interest rates and economic uncertainty.
• Consumer spending is moderating due to inflation and tighter financial conditions.
• Experts anticipate a future shift in market conditions, but the timing remains unclear.
• Several potential catalysts could trigger a more positive economic outlook.

the economic landscape is dynamic and subject to change. Continued monitoring of key indicators and proactive adaptation to evolving conditions will be crucial for businesses and consumers alike. While challenges remain, the expectation is that the current economic climate represents a temporary phase, paving the way for future growth and stability.