
San Francisco Hotels Are World’s Priciest as Rates Surge - zt
http://www.bloomberg.com/news/articles/2015-06-30/san-francisco-hotels-are-world-s-priciest-as-rates-surge#
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habosa
I wonder how the analysis was done. San Francisco has a very different "hotel"
presence than other cities I've been in. Here are just a few unique things:

* SF is one of the few cities I've ever been in where you will see motels in populous city areas. Normally you'd think in such a crowded city having a huge parking lot on your property would be foolish, but it seems to be popular. Off the top of my head I can think of 2 motels in the Marina/Cow Hollow area and 2 more in Soma, both of which are neighborhoods with insanely high real estate prices.

* In the areas in/around the Tenderloin there are a huge number of "hotels" that are basically extended stay residences for people who can't afford any apartment in SF. They're a few hundred bucks a month and feature tiny, often dirty rooms with shared bathrooms and no kitchen. However they're all called "____ Hotel" so they'd appear in any blind analysis of the city.

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mikeash
Regarding motels, I imagine that's the a consequence of the same anti-
development forces that have been driving up real estate prices and produce
extremely valuable areas filled with low-rise buildings.

Having a huge parking lot on your property in the middle of SF has to be
foolish. At the very least it _must_ be worth building a multi-level garage to
save space. However, is it feasible to replace it with anything else? If you
already have a parking lot, perhaps because it was totally sensible in 1932 or
whenever it was originally built, what does it take to build something more
valuable on that land today?

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greggman
I'm really curious where these numbers come from. I've found NYC always way
more expensive than SF. Similarly London is hugely expensive. I'm wondering it
there's either a bias in the way I search and look (booking.com) or whether
there's some other explanation like a few super expensive places raising the
price.

As an example I just put in Oct 11, 2015.

SF:

    
    
         21 hotels $55-$110
         36 hotels $110-$160
         55 hotels $160-$220
        123 hotels $220+
    

NYC:

    
    
          4 hotels $55-$110
          7 hotels $110-$160
         35 hotels $160-$220
        367 hotels $220+

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johansch
In London I can always find ok hotels for $150/night. In SF it's 300-350
minimum. All prices including taxes. (Why don't you just include them in the
display price, americans?)

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adventured
At least four reasons. Americans are used to the system they have, it doesn't
cause any meaningful economic problems domestically (complaints come almost
exclusively from foreigners). Businesses specifically want to show you the
price they're charging you, as apart from the taxes they're forced to collect;
that also enables businesses to charge a bit more in the rounding schemes (eg
sell a blu-ray for $5 headline price, charge tax after; if they had to build
tax into it, they'd lose ~6% on the pricing to use the rounding promotion
approach). The US has 50 states with different tax schemes, that's a nightmare
for labeling goods.

For example, usually a bag of chips at Target or Walmart or a convenience
store will say eg $3.99 printed on the bag. Some stores will slap their own
dominant label on there, others choose not to.

Vendors often stock the shelves at stores, especially for certain categories
of products, and store types. The chip delivery guy will stock the convenience
store, Walmart, etc.

Chip production (eg Doritos) and delivery is limited to just a few factories,
but they distribute to every state. For convenience, for decades, the
companies have typically pre-stamped prices on chip bags.

So why not do it with hotels? Because no other segment of the economy tends to
do it, and for the other reason mentioned: it cuts into price rounding
advertising methods (or you have to raise prices to the next rounding).

If you want taxes built into the pricing on consumer goods, either they have
to stop price labeling before delivery, or customize for every state. At this
point, nobody really wants to change, because the system works fine as is. Ie
it's good enough, but not perfect.

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johansch
Contrast: In Europe typically no items in a grocery store have their price
printed onto the actual product. Or even have price tags. You look up the
product price by the price sign placed adjacently. It includes (by law) a
handy price comparison (in the format of currency per e.g. liter/kg/g/etc.)

I think your system sucks donkey ass. :)

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linkregister
Also in the U.S. almost all major groceries likewise use signs on the shelf to
display price, and the cashier reads the bar code to retrieve it at checkout.

The actual reason is a lack of sufficient pressure to change this practice.

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akulbe
And people wonder why Airbnb is taking off like it is. The hotel industry is a
cartel.

I hope Airbnb stays A Good Thing™ for a long time. I fear with its high
valuation that it will only last so long, before sweeping changes are made
that make it no longer worth it.

For now, I'm going to ride the train to the end of the line.

DISCLAIMER: I am an Airbnb host, but not in Cali.

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pkaye
Then why are Airbnb rentals in SF more expensive that in other cities? Hint:
they all charge what the market will bare.

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droithomme
I stay at these places when I'm in town.

[http://www.sfhostels.org/](http://www.sfhostels.org/)

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fennecfoxen
I prefer [https://www.airbnb.com/](https://www.airbnb.com/) myself, it's sort
of in between :P

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justizin
Thanks, I mean, why would anyone build hotels and employ union workers when
they can just convert housing to hotels?

</rant>

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fennecfoxen
Exactly. Why pay for more capital and labor expenses to convert existing
productive real estate into a generic, anodyne hotel experience with amenities
like daily housekeeping service that I don't need? One that's probably located
in the tourist-trap district? Instead, I can utilize existing capital more
efficiently and enjoy myself in a real part of San Francisco designed for
actual human beings, and spend the savings on something more relevant to my
interests (like more frequent travel). Almost certainly this means more
profits going to local businesses -- and to the homeowner as well, who is more
likely to spend them locally than HotelCorp.

Granted, there are some contract issues if the host _rents_ the apartment
instead of owning it, and there is a risk of some externalities (chronic noisy
guests upsetting neighbors) which could be managed with light regulation...
but surely the idea is a sound one which should be embraced and encouraged.
Right?

And those would-be unionized hotel employees would be there to do useful work
for fair pay, no? They're not charity cases and I should't feel bad or feel
compelled to use their services if I don't need those services at all, right?

</counter-rant>

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Shivetya
Is this before or after the fourteen percent hotel tax? that would be another
bump of nearly sixty bucks on the average room price given.

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justizin
Both cities have hotel taxes which should be included in the price of the
room, AFAIK.

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Betelgeuse90
I wonder what the median prices are.

This smells like it might be the case that most hotels cost significantly less
than the average but a few super ridiculously expensive ones jack up the
average by a very large margin.

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jonny_eh
How is it that Airbnb is hurting hotels again? SF is the hometown of Airbnb,
and yet hotel prices are still sky high.

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dopamean
In all the moaning I've heard about Airbnb I have not actually heard anyone
make the claim that they are hurting hotels. I'm sure actual hotel company
executives have but most of the complaining I've heard has to do with lots of
strangers coming through people's buildings and things like that.

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paulhauggis
It's not expensive, it's 'progressive'

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capkutay
Why build hotels for the rich when SF can have miles of abandoned warehouses
for the destitute?

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marincounty
San Francisco is a union city. They do a lot of building. Too much in my
opinion; San Francisco is a small city. I don't think there's a shortage of
hotels in San Fancisco? Even in Bubbles(like SF is currently experiencing), I
have seen high end hotels leave rooms sit empty. I worked at the Fairmont
during one of these booms, and they didn't budge on prices--they just left
rooms empty. The twins just didn't need the money? Now shelters for the
homeless are another story. SF is one of those city's you can really end up
homeless--really fast. Maybe faster than NY? Rents have skyrocketed in SF, and
the Bay Area these last few years. I have never seen anything quite like this?

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capkutay
90% of the city is zoned for 4 story buildings. Almost every development
proposal gets shortened for whatever reason. Areas that lend well to being
urban, dense hubs for high rise offices/hotels/residential buildings like
Central SOMA are zoned for 4 story buildings. It makes no sense.

