California’s tourism economy grew in 2021, but lags behind pre-pandemic peak
Despite a nearly 50% increase in visitor spending last year, California’s travel and hospitality industry faces daunting challenges – especially in gateway cities that continue to suffer from international travel restrictions and a slow return to business meetings and conventions.
A new Visit California report, prepared by Dean Runyan Associates and detailing the economic impact of tourism in California in 2021, showed mixed results:
— Visitor spending in 2021 increased by 46% over 2020 to $100.2 billion.
— Visitor-generated tax revenue for state and local government increased by a third, to $9.8 billion, in 2021.
— Tourism jobs, which were halved at the dawn of the pandemic in 2020, recovered slowly in 2021, increasing 6.4% to 927,000.
— California’s visitor spending number remained just 69% of the record-setting levels recorded in 2019, before the pandemic lockdown and subsequent waves of government restrictions. Only one of California’s 58 counties – rural Trinity County in northwest California – recorded visitor spending that exceeded its 2019 mark.
— Urban destinations that host the bulk of California’s hotels, restaurants and tourism attractions have been particularly slow to recover, according to the report. San Francisco, for instance, recorded $6.1 billion in visitor spending in 2021 – just 43% of the $14.2 billion reached in 2019.
— Spending by international visitors, which stood at nearly $28 billion in 2019 and was California’s largest export, plummeted to just $5.4 billion in 2021.
“After a devastating 2020, visitor spending is on the stairway to recovery, but we still have a long way to go,” said Caroline Beteta, president and CEO of Visit California, the state’s tourism marketing organization. “Cities continue to suffer without the critical international and group business segments.”
Aided by marketing stimulus funds approved by the Legislature in mid-2021, Visit California has launched a variety of initiatives to promote professional meetings and events in California and leisure and business travel to California’s urban hubs.
“The increases in 2021 overall show Visit California’s marketing programs are working,” said Beteta. “The tourism industry and the state need to continue working hand-in-hand to get the word out that California is open for business.”
In February, Visit California launched a new domestic brand campaign with “Am I Dreaming?” a critically acclaimed television spot that premiered during the Super Bowl pregame show. The $22.1 million campaign continues into May.
Following the border reopening in November 2021, Visit California reestablished marketing programs in priority international markets, including Mexico, Canada, United Kingdom, France and Germany to tap into pent-up demand and inspire travelers to choose California for their first long-haul vacations.
Economic projections prepared by Tourism Economics and released by Visit California earlier this year forecast that travel spending will reach $144.6 billion in 2023, nearly the same as 2019. If achieved, the tourism economy will have returned to 2019 levels a year sooner than projected a year ago. Spending now is projected to reach $155.9 billion in 2024.
The release of the economic impact report annually coincides with the beginning of California Tourism Month in May, which the Legislature designated in 2016. Assemblymember Tasha Boerner Horvath, chair of the Assembly Committee on Arts, Entertainment, Sports, Tourism and Internet Media, this year introduced ACR 174 to refresh the designation as California’s tourism economy moves toward full recovery.
“The travel industry is strong, selfless and resilient,” Beteta said. “California Tourism Month is the time for travel and hospitality professionals across California to recognize that and ask Californians to continue supporting local and regional businesses by keeping their 2022 travel spending in California. There is power in California civic pride, and together we can support our own economic recovery.”
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When the Judicial & Law Enforcement Center was built 40 years ago, there were only 19,400 people living in Douglas County.