Industry Update
Press Release 8 July 2020

Study: SF Cleaning Ordinance To Cost Hotels $47 Million

$220,000/hotel will delay reopening, keep employees out of work longer

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California Hotel & Motel Association

SAN FRANCISCO -- The San Francisco Board of Supervisors' Healthy Buildings ordinance will cost San Francisco's 215 hotels $220,000 each adding more than $47 million in annual industry costs, extending hotel closures and extending joblessness for 15,000 employees, according to an independent analysis of the ordinance's cleaning mandates.

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Hotel Asset Value Enhancement calculated costs per occupied room of the incremental cleaning and operating requirements such as labor, materials and laundry, unique to the proposed ordinance concluding they would cost the average sized hotel of 250 rooms $220,000 annually to be in compliance. The study assumed an occupancy rate of 63 percent, which is in line with the CBRE forecast for 2021.

These costs are on top of an estimated $498,000 that an average 250-room hotel will incur to install the best practices for cleaning and social distancing as recommended by the Centers for Disease Control and Prevention, the California Department of Public Health and hotel associations and major hotel brands.

"This is untenable for the ongoing livelihood of San Francisco Hotels and our employees," said Kevin Carroll, President and CEO of the Hotel Council of San Francisco. "How does a hotel that has been closed for four months get with $220,000?"

Members of the Hotel Council of San Francisco, the California Hotel and Lodging Association and workplace safety experts continue to reiterate their strong opposition to the ordinance's mandates that require repeated cleaning of low-touch hotel walls and chandeliers that exceed CDC and CDPH recommendations.

The HotelAVE study appliance all new and necessary sanitation/cleaning requirements of the ordinance to develop an average per occupied room cost. These included additional labor costs, the expense of acquiring additional cleaning materials and the expense of laundering room materials to be in compliance. The per-room cost was applied at a 63 percent occupancy rate for a 250 room hotel, which would total $220,000 annually.

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