Pandemic’s toll on S.F. tourism: $8 billion
2020 saw huge drops in visitors, spending, tax revenues
The coronavirus pandemic plunged San Francisco tourism into its worst financial crisis in modern history, gutting spending by $8 billion in 2020 compared with the prior year.
Total tourist spending was $2.3 billion, a 77.7% drop from the recordhigh $10.3 billion in 2019, according to San Francisco Travel, the city’s tourism bureau. Total visitors were down 61%, to 10.2 million.
More than 65,000 jobs supported by tourism were lost during the pandemic, a drop of 75.8% in one year for the city’s biggest industry.
Joe D’Alessandro, CEO of San Francisco Travel, said the year was “devastating.”
Every 2020 metric was awful compared to 2019: SFO passenger traffic dropped 71.4%, to 16.4 million. Hotel occupancy was 27.2%, compared with prepandemic levels around 85%, as most buildings closed their doors. Tourism tax revenue, including hotel and property taxes, fell by twothirds, to $273.4 million.
Even in 2009, during the last major recession, 15.4 million people visited and spent $7.8 billion, according to San Francisco Travel. For the next decade, those metrics grew every year until the pandem
ic struck.
D’Alessandro expects domestic leisure travelers to return first, followed by international visitors, business travelers and eventually largescale convention traffic. The number of visitors is expected to improve to 15.3 million this year, and spending is expected to grow to $3.5 billion, according to San Francisco Travel.
A full revenue recovery isn’t expected until 2025.
After conventions were canceled last year, the city’s sprawling Moscone Center was repurposed for homeless housing, the city’s coronavirus emergency operations center and now, a mass vaccination site.
Getting major events to return will be critical for an economic recovery, D’Alessandro said.
“We have to get that building open. It’s such an economic engine for downtown, the restaurants and the retail,” said D’Alessandro. “We’re not a destination like South Beach or Las Vegas, and we never will be. We’re much more of a business center.”
Convention attendees, who were effectively banned since last March, spent an average of $182.26 per day in 2020, down sharply from $584.32 in 2019. Overall business travelers fell from 5.7 million in 2019 to 1.1 million in 2020, accounting for only 11% of visitors last year.
D’Alessandro said there were booking commitments from multiple event organizers for conventions this fall. Spring and summer events are all canceled. Such events require months to plan, and the state has yet to issue guidelines for major events to return. Smaller conventions held in hotels could be organized faster, said D’Alessandro, who believes large events can be held safely.
Although Zoom meetings may replace inperson conventions for some, D’Alessandro believes there are many who are eager to meet in person again, eager for the serendipity of unexpected social exchanges.
There are other positive signs: Baseball tickets are on sale, and the Outside Lands music festival is planning a Halloween weekend return.
But persistent challenges including the high cost of doing business, and crime and safety remain concerns, D’Alessandro said. San Francisco’s recovery lags that of other states that have loosened restrictions faster, but it has one of the lowest per capita death rates of any major city.
If vaccinations continue and visitors follow mask and social distancing guidelines, D’Alessandro sees travel ramping up this spring and summer.
“We very much support those rules. We do believe we can reopen safely,” he said. “It shows the world that San Francisco is coming back alive.”
Mayor London Breed said the city will work to restore the economy and tourism.
“Now as our COVID numbers improve and we are rapidly vaccinating thousands of people every day, we need to continue our efforts to reopen businesses, put residents back to work and start welcoming visitors. This is critical for our economic recovery and the future of our city,” Breed said in a statement.
The hotel industry continues to struggle, said Kevin Carroll, CEO of the Hotel Council of San Francisco, which represents owners and operators.
“It’s a pretty serious situation for hotels,” he said, with most of the 25,000person workforce in the city on furloughs or laid off. “They’re trying to decide how to reopen, how to get their employees back.”
The 533room Hotel Nikko near Union Square stayed open throughout the pandemic and lost tens of millions of dollars last year. Some nights, there were zero guests, said Anna Marie Presutti, the hotel’s general manager.
Now, occupancy has improved to around 7% during the week and over 20% on busy weekends, but only around 50 workers are employed. The hotel had around 375 workers before the pandemic.
“It feels like there’s this more positive vibe, that people want to start to travel again,” Presutti said. “As far as hotel rooms being occupied, it’s not made enough of a difference for me to hire more staff.”
Guests are predominantly Californians who drive into the city, which is a limited group, “particularly when there’s not a lot to do,” she said.
Hotel Nikko’s room rates exceeded $300 per night before the pandemic, but the hotel has cut prices by as much as $170, she said.
Presutti is cautiously optimistic that the summer will bring back travelers who are eager to get out as virus trends improve.
“I want this summer to be great,” she said. “I hope there are a lot of people who feel that way.”
The city’s biggest hotel union has also been devastated. Around 90% of Unite Here Local 2’s 14,000 hospitality and food service union members in San Francisco and San Mateo County remain out of work. The union’s health care fund was exhausted at the end of last year.
“For workers and our members and tourism at large, things have not yet come back in any meaningful way,” said Anand Singh, president of Unite Here Local 2. “We expect that to start to change as we start to get into the spring.”
The union is fighting to secure recall rights so longterm workers return to the same jobs they had before the pandemic, rather than being fired and rehired to lower jobs.
Carroll of the Hotel Council said he couldn’t comment on individual hotel contracts, but said hotel owners want to bring back employees as soon as possible. “They would like nothing better,” he said.
Singh is confident visitors will return.
“Tourism is a vastly profitable industry in San Francisco and has been for many, many years. This city has gone through other downturns before,” Singh said. “The industry will find a way.”