I think you are correct that there is a management problem. My own theory is that its big size is a problem, similar to the poor service at the NY Rockefeller Hilton.
Re: the bad neighborhood, it just seems to have gotten worse over the last decade. When Feinstein was running for mayor 20 years ago, she said she was going to clean up the area around Market Street and 8th Street.
It's too bad that Union Square is under renovation. A good place to visit and eat outside is Yerba Buena Gardens between 4th and 5th and between Mission and Howard Streets. It's across the street from MOMA, which is showing an Ansel Adams exhibit. There is an Ansel Adams Museum nearby on Mission Street that announced today that it is closing due to lack of money. It might be worth checking out.