One of the nation’s largest hotels to open in years is already making a splash just days after its San Diego debut.
The Gaylord Pacific Resort & Convention Center, with 1,600 rooms, the West Coast's biggest hotel ballroom and amenities including a water park, is putting the city of Chula Vista on the national hospitality stage.
The property has already signed more than 1 million hotel room-nights tied to meetings and conventions booked for the next decade, according to Julius Robinson, Marriott International’s chief operating officer for the U.S. Western region.
City and regional government officials estimate the development, about 10 miles south of downtown San Diego, will generate $475 million in annual new economic impact for an area of Chula Vista once dominated by an aging electric generating plant and other industrial buildings that were relocated or demolished.
“This project is a game changer for the South Bay and a powerful example of how public access and economic development can go hand in hand,” said Ann Moore, vice chair and Chula Vista’s appointee on the Port of San Diego board of commissioners.
Regional officials are expecting more transformative commercial development following the hotel's soft opening last week. Several residential towers are now in the works near the resort, with retail and at least two more hotels being planned by other developers.
Despite the early success signs, analysts note the hotel faces headwinds in the form of reduced consumer spending caused by economic uncertainty. That concern, largely tied to tariffs, has caused a pullback in meetings business and international tourism, industry professionals tell CoStar News.
First of its kind
The $1.3 billion project near San Diego is the nation’s second-largest hospitality property to debut in the past five years and the largest to open so far in 2025. It sits within a 550-acre swath that is now the largest piece of oceanfront land still available for development on the West Coast.
The 36-acre resort, more than 20 years in the making, was developed by Houston-based RIDA Development and is operated by Marriott International’s resort- and convention-focused Gaylord brand.
With its swooping exterior building design resembling ocean waves, 12 bars and eateries, luxury spas and a water park with a lazy river and winding chute slide, the Gaylord is seeking to compete by presenting Chula Vista’s first-ever resort featuring full amenities and convention space.
One of its four large ballrooms — measuring 140,000 square feet and with a capacity for 10,000 attendees — is billed by Marriott as the biggest hotel ballroom on the West Coast.
Real estate economist Alan Nevin noted that several housing developments went into the pipeline years ago in anticipation of the resort’s potential catalyst effects, and more retail, hotel and other projects are likely on the way. They are intended to capitalize on what is already expected to be robust business from conventions and meetings already booked for the resort’s 500,000 square feet of meeting spaces.
“Gaylord has always been very good at generating meetings business, especially from midsized conventions,” said Nevin, director of economic research for development consulting firm Gafcon in San Diego. He wasn't involved with the Gaylord project but has consulted for some nearby residential developments in the works.
The Gaylord’s square footage devoted to meeting spaces is by far the largest for hotels in the San Diego region and among the largest in the Western United States. That scope is paying off, officials say.
Marriott's Robinson told the crowd at an opening ceremony that 57% of the organizations booking meetings at the hotel have never before booked such events in Southern California, meaning new business for the region’s hotel market. Also, the pre-booked, pre-opening hotel revenue for meetings at the new Gaylord set a company record for Marriott, though the company was not divulging the dollar figure.
Capitalizing on visitor traffic
Several developers are looking to capitalize on expected ripple demand for nearby housing, retail, recreation and hospitality services.
Currently in early construction phases about a block from the Gaylord is developer Pacifica Companies’ $1 billion Amara Bay project, with multiphase plans calling for 1,500 residential condos in seven towers with adjacent retail and office space. A future phase of that project includes a 250-room hotel, though branding and other details have not been finalized.
City filings show developer MountainWest plans to build a project near that site with two residential towers with a total of more than 400 apartments, a portion of which will be designated as affordable. Still in early planning, that project also calls for about 40 for-sale condo units and a 400-room hotel.
“With several more phases in the works along the South Bay, that commercial development could be an economic engine that could lead to stronger growth in the retail and office markets,” said Joshua Ohl, senior director of market analytics for CoStar Group in San Diego. “South County lacks high-end office space that might attract occupiers, but with a string of hospitality, housing and retail development along the water, that could provide an important mix in helping to bring office development and tenants to an underserved part of the region.”
Ohl said the Gaylord’s expected contingents of tourists and convention-goers should increase demand for the area’s retail, possibly providing opportunities to bring more nighttime entertainment and spending to the South County area.
Nevin said new apartments, especially in the MountainWest project, are likely to be used by employees of the hotel and nearby new businesses. Operators said the Gaylord resort is expected to support 1,600 permanent jobs when fully operational by late June.
Mixed demand effects
The Gaylord project took more than two decades of coordination among numerous regional and state coastal development agencies. Its May 15 soft opening followed three years of construction and numerous delays over previous years marked by financing challenges posed by a major national recession and a global pandemic.
RIDA Development CEO Ira Mitzner told an opening-day dedication crowd that lenders likely “thought I was crazy, hearing me say we need another hotel" during the pandemic, when "no one was staying at hotels anywhere in the world."
Analysts are cautiously predicting new demand for the regional hotel market, which has been in steady recovery from the pandemic during the past two years. Much will depend on the effects of nationwide tariff-related concerns on consumer spending, especially for travel and planning for business meetings.
“There is a high probability that this property could cannibalize other parts of San Diego, due to the fact that it is brand new, and depends on how competitive they are on meetings and conventions,” said Alan Reay, president of California-focused hotel brokerage and research firm Atlas Hospitality. “It is important to note that there has been a pullback from corporations booking major conventions and increased competition for this business from markets like Las Vegas.”
Reay said he is also watching trends including a recent drop in international tourism to California and other U.S. destinations, sparked in part by tariff disputes. Also, financing and construction costs for hotel projects remain challenging by historical standards, which could delay future hospitality projects near the Chula Vista Gaylord.
The Gaylord arrives as the San Diego region’s second-largest hotel by room count, bested only by the Manchester Grand Hyatt’s 1,628 rooms in downtown San Diego. The direction of demand in the larger tourism economy will decide the extent to which the region can absorb the newest Gaylord hotel and convention space without cannibalizing other properties.
Michael Stathokostopoulos, senior director of hospitality analytics for CoStar Group, noted the San Diego region is on track for a 4.3% rise in room supply growth over the next two years, high by historical standards. About 3.3% growth is expected for 2025, with 2.5% coming from the Gaylord property alone.
To make the Gaylord project feasible, a complex combination of traditional bank loans, bond financing and equity participation was spearhead by Wells Fargo and involved numerous other nationally known entities, including Ares Management, Bank of America, JP Morgan Chase and Goldman Sachs.
“They understood that we’re coming back, like we’ve always come back before,” Mitzner said of the project’s backers and the recovering tourism climate.