California visitors spent $100 billion last year. Here’s why state tourism still struggles
California tourism is recovering slowly, but visitor spending still lags behind pre-pandemic records and most travel-related jobs slashed during COVID-19 have yet to return, according to a report from Visit California.
Few industries were hit as hard as travel and hospitality when the pandemic began in March 2020. Concerts and festivals were canceled. Hotels and businesses shuttered, and parks closed to visitors.
The state’s tourism marketing organization found that the industry still faces massive roadblocks in its path to recovery, particularly in major “gateway” cities still suffering from limited international travel and a lack of business meetings and conventions.
In 2021, visitor spending increased to $100.2 billion, up 46% compared to spending in 2020. But that’s still significantly lower than in 2019, when visitors spent a record $145 billion around the state, according to the report prepared by Dean Runyan Associates and released Friday.
“Strong demand for overnight accommodations” and the increased price of goods drove gains in visitor spending last year, the report found. And while employment in tourism is recovering, ”the rate of recovery is much reduced,” according to the report.
The travel industry overall also added about 56,000 jobs in 2021 for a total of about 927,000, an increase of about 6% compared to the prior year. Most of those added jobs were in leisure and hospitality-related fields, while the transportation industry lost jobs.
Visitor-generated tax revenue for state and local government also increased by a third, to $9.8 billion, in 2021, according to the report. That’s down from a peak in 2019, when tourism was bringing in more than $20 billion to state and local government via tax revenue.
One area that has yet to see signs of growth is spending by international visitors. Historically, international spending has constituted 18% to 22% of total travel spending in the state. But 2021 spending remained flat-lined to 6%, the report found, as travel restrictions and COVID-19 variants limited tourism abroad.
Urban destinations that host the majority of the state’s hotels, restaurants and tourism attractions have been particularly slow to recover, according to the report.
San Francisco County, for instance, recorded $6.1 billion in visitor spending in 2021, compared to $14.2 billion in 2019. Visitors spent about $19.6 billion in Los Angeles County last year, about 60% of of the record $32.7 billion reached in 2019.
Sacramento County recorded about $3 billion in visitor spending in 2021 — a 64% increase compared to 2020, but still about two-thirds of visitor spending during 2019.
“After a devastating 2020, visitor spending is on the stairway to recovery, but we still have a long way to go,” said Visit California president and CEO Caroline Beteta in a statement. “Cities continue to suffer without the critical international and group business segments.”
Economic projections prepared by Tourism Economics and released by Visit California in February forecast that travel spending will reach $144.6 billion in 2023, roughly in-line with pre-pandemic levels.