Fairmont Hotels & Resorts inks $550 million deal with Manchester Financial Group

HOSPITALITY: New Luxury Hotel Planned for Downtown

A new 36-story luxury hotel with an all-glass façade and sweeping views of San Diego's Bay and skyline is coming to downtown. And while it's not scheduled to open until 2027, there's already plenty of buzz around the $550 million project. Fairmont Hotels & Resorts, part of Accor – the second largest operator of luxury hotels in the world – has signed a definitive agreement with Manchester Financial Group to develop and manage a new Fairmont hotel just steps from the bayfront in the North Embarcadero area, adjacent to the USS Midway Museum near the cruise ship terminal. The hotel will have 1,160 rooms – to date the largest Fairmont in the United States. Fairmont has more than 80 hotels – including high end spots The Plaza in New York City, The Savoy in London and Fairmont Banff Springs in the Canadian Rockies – under the umbrella of Accor, which has about 5,300 properties throughout more than 110 countries.

This isn't the first time the groups have partnered – in 2015, Fairmont took over the Grand Del Mar, a luxury spot and Forbes Travel Guide triple Five-Star winner which originally opened in 2007.

“We are thrilled to have the opportunity to work again with our partners at Manchester Financial Group to bring another landmark property to life,” said Mark Willis, CEO of Fairmont Hotels & Resorts.

“This project represents an incredible opportunity to bring the signature luxury experience for which Fairmont is known around the globe, on an unprecedented scale and magnitude to downtown San Diego,” Willis added. “This marks the continued expansion of the brand, not only across California, but further strengthening Fairmont's presence as one of the leading luxury hotel brands in North America.”

To be called Fairmont Manchester San Diego, the development will add to an already stellar cluster of large convention hotels within walking distance of the San Diego Convention Center and Gaslamp Quarter.

The hotel's rooms include 69 suites and Fairmont Gold, the brand's distinctive “hotel-within-a-hotel” experience that includes VIP service, exclusive lounge and private reception desk.

High-end amenities at the hotel will include luxury spa and fitness facilities, a rooftop pool, and more than 120,000 square feet of indoor and outdoor meeting space – including two 20,000 square-foot ballrooms. Six dining venues are planned, including a 160-seat signature restaurant, coastal Baja cuisine, noodle shop, rooftop poolside grill, gourmet café and lobby bar. All food spots will have both indoor and outdoor seating.

‘Stunning Design, Impeccable Service'

Doug Manchester, chairman of Manchester Financial Group, said he “could not think of a more perfect brand and partner to transform this prime location into a globally renowned hotel,” and lauded the hotel's “stunning design… impeccable service and best-in-class amenities. Fairmont Manchester San Diego is going to set a new standard for luxury hospitality in downtown San Diego, and I look forward to the opportunities this partnership will bring to the market.”

Alan X. Reay, president at Atlas Hospitality Group, said the project would be the second largest hotel in the state to be constructed, second only to the 1,600-room The Gaylord Pacific Resort & Convention Center in Chula Vista, set to open in 2025. He said he believed that the only other area where hotels of this size are being planned is Las Vegas – and those projects include a casino component.

Reay said the construction of both larger hotels is “a huge endorsement to the strength of the San Diego hospitality market” and that because Fairmont is positioned as a higher-end luxury brand, that “again bodes well for San Diego.”

“It is interesting to note that in all of 2022 California had a total of 6,993 new rooms opened,” he said. “The Gaylord and new proposed Fairmont would be equal to 39% of the total number of rooms opened last year.” “The vast majority of new hotels are in the limited service sector and tend to be in the 100- to 175-room range,” Reay added. “To have two hotels over 1,000 rooms each for San Diego, says so much about the strength of the market and in particular the perceived strength of the meetings and convention business post-COVID.”

Fairmont officials say the hotel is part of a landmark development transforming San Diego's downtown waterfront with more than five acres of green space and more than 1.7 million square feet of offices, retail, restaurants, public art and entertainment. Manchester said he's long had his sights set on “what I think is one of the most outstanding stretches of land in the world.”

If the Convention Center expands in the near future, the Fairmont opening will be a boon to overall downtown hotel occupancy, said Bob Rauch, a Certified Hotel Administrator.

“If the Center is expanded by the time the Fairmont opens, there will be no negative impact to occupancy,”

Rauch said. “If not, then the hotels that are being added to downtown in this decade might reduce the downtown occupancy percent from the low 80s (percentage) to the high 70s (percentage) for a couple of years – still well above most markets. San Diego continues to add tremendous value to the downtown hotel market with IQHQ, Seaport Village redevelopment, Horton Plaza redevelopment, the new (San Diego International Airport) Terminal 1 construction project and more.”