Under the Hood: A Growing Divide Between Lodging Supply and Demand
By Tim Carl
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The Spotlight
Welcome to “Under the Hood,” our exclusive Saturday series for Napa Valley Features paid subscribers. This week we examine the growing imbalance in Napa County’s lodging market — where hotel development continues despite lower-than-expected demand, creating economic uncertainty for the region.
Additionally, we’re diving into the latest data from our readers’ polls and providing insights from our economic dashboard, covering local Napa Valley, U.S. and global markets.
In addition, we feature "What We Are Reading," a section with a handpicked list of recent articles that provides a variety of viewpoints on issues important to our community and beyond.
“What We Are Reading” quotes of the day:
“Napa County may soon find itself with too many rooms chasing too few visitors — perhaps it already has.” - Today’s Under the Hood.
"Let’s talk about the financial catastrophe these 200% wine tariffs will create. Not in theory but in reality. In my case, the $350,000 worth of wine I have coming in September? I’ve already paid for it. That money is gone. Now I have to pay a 200% tariff just to bring it into the country. That means coughing up another $700,000 overnight." – from Lyle Fass, in "200% tariffs on European wines would be extremely dangerous for California wineries," Tablas Creek Blog.
"Constellation has been a huge player for years and they will definitely leave a wake in their path of exit." – from Shannon Gunier, in "A sign of the times," Meininger’s International.
"Trust in others is a happiness multiplier." – from Gallup, in "Is a Kinder World a Happier One?"
"This work really highlights how much biology can do to help address this crisis." – from Colin Scott, in "Strong, flexible ‘nylon’ made by engineered bacteria for the first time." - Nature.
"My enthusiasm gave way to skepticism, then my skepticism to indignation, as I discovered the underside of the experiment and the evidence of its manipulation." – from Thibault Le Texier, in "Should Zimbardo’s Stanford Prison Experiment be retracted?" - Retraction Watch.
A Growing Divide Between Lodging Supply and Demand
By Tim Carl
NAPA VALLEY, Calif. — Recent data highlight ongoing challenges in Napa County’s lodging industry: While hotel revenue and average daily rates have grown year-over-year, occupancy remains well below pre-pandemic levels. While YOY changes in January (2025 vs. 2024) indicate short-term improvement, they do not reflect the broader reality: Occupancy has never recovered to pre-pandemic levels, and demand has declined while supply continues to increase. Based on the expansion of both hotel-room numbers and work-force housing, the expectation appears to have been that demand would continue growing from levels seen between 2016 and 2019, but instead, the market has moved largely in the opposite direction, never rebounding fully from the pandemic downturn.