Will tourism and travel return with California reopening?
As California drops capacity and social distancing rules, experts are tempering expectations on a full rebound of the states tourism industry. CALIFORNIA, USA  This story was originally published by CalMatters. When COVID-19 shut down businesses and travel across the U.S., communities such as Anaheim that rely heavily on entertainment and tourism were some of the hardest hit. Hotel occupancy taxes, which accounts for more than half the citys budget, plummeted 90% between 2019 and 2020. We depend on large groups at Disneyland, Angels games, said Jay Burress, president and CEO of Visit Anaheim, the citys nonprofit tourism office. It was devastating for our industry and our city.  With California reopening today to mostly full capacity, its travel and tourism industry is aching for a significant bounce back. But experts are tempering expectations; domestic travel wont fully recover until 2023 and the number of international tourists, especially from China and Mexico, remain less than half of pre-pandemic levels. And a full reopening wont happen until large conventions return  not a certainty with the wholesale move to work shift. Rebounding as quickly as possible is vitally important, said Caroline Beteta, president and CEO of Visit California, a nonprofit organization promoting travel to the state. Californias tourism industry provides more than 1 million jobs and supports thousands of businesses.  The state generated $144.9 billion in travel spending in 2019, according to a study by travel and tourism research group Dean Runyan Associates. But when the pandemic hit, travel and occupancy restrictions devastated gains that California had nurtured after the Great Recession. While tourism dropped 36% nationally in 2020, Californias tourism revenue dropped 55%, according to Dean Runyan. And more than half of Californias roughly 1.2 million-person tourism workforce lost their jobs in the first month of the lockdown, according to a report released in May 2020. The Legislature passed a law requiring businesses to prioritize rehiring those who lost jobs, and many workers are hoping to resume work. Low cases, high vaccination aid California reopening  Before the pandemic, the city of Anaheim had so many visitors, Burress said he feared they might get citations for over-congestion. Instead, the tourism director said this past year felt more like a zombie apocalypse.  We had six years of record numbers coming into Anaheim and Orange County, said Burress. Normally hotels were running at 90% occupancy. And then it was in the single digits.  The industry is already beginning to see some bounce back. This April, Californias leisure and hospitality sector was up 400,000 jobs year over year. On the eve of reopening, Gov. Gavin Newsom made an appearance Monday in San Francisco at the historic Ferry Building, a draw for visitors with its artisanal food and restaurants. He noted Californias economy this year has outperformed other states, including Texas and Florida, because of its public health precautions and vaccination campaign. Theres hope that the upward trend will continue. With one of the nations highest vaccination rates and lowest case rates, California is poised for a powerful comeback, said Beteta. Leisure travelers will lead the way. We expect outdoor activities and road trips will be extremely popular.  But experts acknowledge that returning to normal wont happen instantaneously despite speculation of a second coming of the Roaring 20s. While many restrictions have been lifted in California, they arent the only inhibitors to people going on vacation. California travel hasnt recovered  The drop in visitor spending isnt due entirely to business closures and restrictions, Beteta said. Consumers must be willing to travel, and for much of 2020, more than half were not willing to venture out at all.  Domestic travel to California is expected to rebound this year to 75% of its 2019 levels. But its not expected to recover entirely until 2023, according to the most recent Tourism Economics report prepared for Visit California released this April. International travel remains another question mark as other countries continue to grapple with the virus and travel restrictions remain in place. Inbound international travel to California fell 79% in 2020 and is expected to reach just 41% of 2019 levels this year, according to Tourism Economics. Travellers from Asia and Mexico make up two of the biggest spending groups in the state, according to Visit California. Tourists from China alone spent $4 billion in California in 2019. San Francisco is likely to feel the loss of international travellers the hardest. Foreign visitors account for 61% of total overnight spending city-wide, the largest share of any major U.S. city, according to data from the San Francisco Travel Association. San Francisco is also the biggest convention city in the state and typically generates $8.3 billion annually on overnight spending at hotels alone. But experts expect conventions to be one of the last tourism industries to rebound this year, largely due to the fact that California is keeping restrictions on indoor gatherings of more than 5,000 people in place until Oct. 1. Convention spending has larger economic impact  The money generated from conventions is considered integral to the city. Its vital to the citys health. Its vital to our hotel community, our restaurant community, said Nicole Rogers, executive vice president and chief sales officer for the San Francisco Travel Association. While tourism is important to us  and we absolutely cant function without it, the convention is a higher spend on average because companies are paying, plus the attendees are paying.  Conferences held at San Franciscos Moscone Center can hold upwards of 10,000 attendees at a time. But the economic impact has a ripple effect. For example, during the annual Dreamforce conference put on by San Francisco tech giant Salesforce, more than 30,000 hotel rooms a night are booked. The city typically holds 50 to 60 major conventions a year. So far, just two have been confirmed this fall.