Bay Area tourism spending fell by $550M in 2020, but leaders have plans to revitalize the industry.
Visitor spending was slashed more than $500 million in 2020, but leaders have plans to get the industry back on track
The COVID-19 pandemic has upended Bay Area tourism worse than any other economic crisis in modern history.
In San Jose, where city leaders had built a strong business travel base and were just beginning to tap into the leisure market, tourism nearly came to a screeching halt last year.
Spending from international tourists in San Jose dropped by 69% while total overnight visitor spending was slashed in half — falling from $1.03 billion in 2019 to $463 million in 2020, according to estimates from Tourism Economics.
“2019 was fantastic and the first three months of 2020 were even looking better and then boom — we hit a brick wall with the pandemic,” said John LaFortune, the new president and CEO of Team San Jose.
The pandemic’s effect was felt similarly in San Francisco — the region’s hottest tourism market — where total tourism spending in the city dropped 77.7% from 2019 to 2020. Total visitors to San Francisco were down 61%.
On top of the loss of tourist dollars, more than 65,000 employees who contributed to San Francisco’s tourism industry lost their jobs during the pandemic, according to data from San Francisco Travel, the city’s tourism agency.
To learn more about what has happened to the region’s tourism industry over the past 14 months and how industry leaders plan to come back from this, we sat down, virtually, with LaFortune. His comments have been edited for length and clarity.
Q How does the hit that the Bay Area tourism industry has taken due to the pandemic compare to other financially difficult times in our history?
A There have been times where things have plunged, but nothing as substantial as what we’re going through now. With the dotcom crash and the Great Recession, this surpasses that considerably. It was really due to the shelter-in-place. No one is going anywhere, travel has stopped, nothing is open, everyone working from home and no one is hosting any events.
This time the sector that was hit extremely hard was the hotel industry and the hospitality sector. In 2019, San Jose saw 6.3 million overnight visitors. In 2020, that number was 2.8 million and in 2021, we’re expecting 2.7 million. And I think it will take several years to get back to those 2019 numbers.
Q How does the significant decrease in visitors and tourists impact the Bay Area as a whole and the people who live here?
A As an organization (at Team San Jose), our main goal is to generate revenue for the city and the better we do, we can really help out the community. A steep decline in overnight stays means that first of all, the hotels are lacking in revenue. The less revenue that they receive, the fewer people they can employ, which hurts the area as a whole, and there’s a decrease in taxes going to the city, which means less funding for our convention center and theaters. The 14%-15% hotel tax that someone pays as part of the local tourism tax is how we fund ourwork.
Q How do you think the pandemic will affect large corporate events and conventions that were popular in San Jose and Silicon Valley pre-pandemic?
A Most large events — like those with more than 5,000 attendees — are booked two to three years in advance, so that’s not going to come back right away. Our clients have indicated they will come back eventually. But I think first we’ll start seeing hybrid events where half of the event is streaming and half is gathering but not in masses and smaller, self-contained meetings within a hotel.
Q Are there any unique factors that you feel really hurt the tourism industry here in California as a result of the pandemic?
A One thing that did not help California in any way is that it was the last to receive any meeting and convention guidelines on how to open, when to open and what the capacity limits would be. We were the last in the nation to receive this kind of guidance, so that puts us at a huge competitive disadvantage because our clients look elsewhere. Instead, they look at states that are actually open or have a guideline that they can go by, telling them when and how they will be allowed to have their event.
Q Now that you have finally received those guidelines, what are they telling you as far as large events?
A The big date we’re looking toward is June 15. Come that date, large venues, such as our convention center and the theaters that we manage, can open up with a mask mandate but also with 5,000 attendees or less. If there are over 5,000 attendees, they have to show vaccination cards or a COVID test within the past three days. Those rules go until Oct. 1, and then we’re supposed to be able to drop all restrictions.
Q The pandemic has hit the tourism industry harder than most. Can you find any silver livings?
A I think a silver lining of this whole pandemic is just taking away that we can be more community-minded than we ever were. During this time, we really turned our marketing toward a local or regional approach. Whereas before we tried to get patrons to come from outside the area or outside of the state, we knew that wasn’t really going to happen for a while. So we really pushed local and regional marketing, such as promoting an overnight stay for a family from Gilroy. That’s a big change that we didn’t do in the past and we want to continue to do that in many ways as part of our goal to be more communityminded.