With Local Economy Surging, SFO Brings Back Plans for $237MM Hotel

SFO, San Francisco, Bay Area, Hyatt, Webcorp Builders, Hornberger + Worstell, ED2 International,

By Michele Chandler

San Francisco International Airport’s new airport-owned and privately managed $237 million Grand Hyatt luxury hotel is on track for a completion date of July 2019.

The deal between SFO and Hyatt gave branding and managing rights to Hyatt, but allows SFO to retain ownership of the property. The airport will finance the $237 million for the hotel’s construction. Groundbreaking for the hotel was held on June 20th of 2017.

No zoning changes were required to accommodate the hotel, which is going up in approximately the same location as the prior hotel, giving up-close views of jumbo jets on the tarmac.

The general contractor for the new hotel is Webcorp Builders, while Hornberger + Worstell of San Francisco and ED2 International LLC are the architectural firms for the project. The hotel project will aim to achieve the Building Council’s Leadership in Energy and Environmental Design (LEED) Gold certification and a four-star designation.

AirTrain’s light rail system will provide direct access to the 351-room hotel, which is being built on a 4.2-acre property that was the site of a former Hilton hotel that was demolished in the late 1990s to make way for roadway improvements needed for the airport’s international terminal off Highway 101.

“When that [hotel] went away some 20 years ago, we were always looking for an opportunity to bring a hotel on site back to the airport” after the improvements were completed, said airport public relations officer Doug Yakel.

However, that plan did not immediately move forward, Yakel said. Several events depressed air travel and industry revenues across the board, including the dot-com bubble burst in 2000, the September 11, 2001 terror attacks in the United States and the severe acute respiratory syndrome (SARS) outbreak of 2003 that infected hundreds of people in more than three dozen countries. “All of these things caused a downturn in our industry [and] in traffic at SFO,” he said. “There was a long period where things really weren’t right to bring back a hotel.”

But during the past seven years, Yakel said, there’s been “a real resurgence in passenger traffic, [and] we’re now back in a position where it makes good sense for us.”

The new airport hotel is seen as necessary as the number of air travelers at the airport steadily rises and SFO continues to set records for passenger traffic.

For the most recent fiscal year ended June 30, the airport handled 53.9 million passengers, a new high and up from 53.1 million passengers in 2016 and 50 million annual passengers in 2015.

The new hotel will include 351 soundproofed guest rooms, including 21 suites, along with a selection of full-service and casual restaurants, 15,000 square feet of flexible meeting space, two bars, a 2,700-square-foot fitness center and 215-space parking lot.

Once open, the hotel is expected to generate 200 hospitality jobs.

SFO already offers many upscale amenities, including the world’s first in-airport yoga room, a spa, medical clinic, 63 restaurants, showers and a full-service travel agency.

SFO is now in its seventh year of sustained passenger traffic growth, with resulting gains in employment, income, business activity and visitor spending, according to the 2017 SFO Economic Impact Report released Monday.

The report found that SFO directly accounted for more than $8.4 billion in business activity in the 2016-2017 fiscal year, including over 42,800 jobs. This represents a significant increase over the previous report, which covered the 2015-2016 fiscal year and reported $7.9 billion in business activity and 39,400 direct jobs.

“We are proud to see SFO’s economic contribution on the rise,” said Airport Director Ivar Satero in the release. “New airlines and new destinations are good for travelers, but they also benefit local communities, providing more employment and business income.”