Surprised by the woes at Hard Rock Hotel or the Natural History Museum? Consider this: Jerry Morrison, hotel guru in La Jolla, says "To quote a broker in California, hotels are selling by the pound. They are commodities and we have ten years worth of supply." And San Diego? "Anything that has been built or refinanced in the last five years is upside down [that is, the owner owes more than the asset is worth.]" In June, the upscale 258-room W Hotel at 421 B Street went into default and went back to its lenders, a San Clemente real estate investment trust. But New York City can top that. This week, the W Hotel Union Square in Manhattan went for $2 million at auction. Dubai World's private equity arm had paid $282 million for the hotel in 2006, according to the Wall Street Journal. Dubai World is in deep, deep trouble.

According to Smith Travel Research, for the month ended November 28, San Diego hotels' revenue per available room was down 12.2% from a year ago. Average daily rate was down 9.3%.