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California Tourism Industry Reeling After Decade of Record Growth

Coronavirus pandemic ends Golden State’s decade of growth in spending,
 jobs and taxes generated

Sacramento, Calif. (May 4, 2020) -- The coronavirus pandemic has devastated California’s tourism industry, erasing a record 10 years of growth in visitor spending, state and local tax revenue and jobs created, according to new economic data.

 

Tourism Economics projects California will lose $72.1 billion in visitor spending this year, nearly half of what was generated in 2019. The study also showed the pandemic will take 613,000 California jobs in May, more than half the workforce that had grown an average 3.2 percent a year for the last decade to employ 1.2 million Californians in 2019.

 

The projections come as Visit California released its 2019 economic impact report showing visitors to California generated more spending, tax revenue and jobs for a record 10th consecutive year in 2019. 

 

The “California Travel Impacts” report, prepared for Visit California by Dean Runyan Associates, shows visitors spent $144.9 billion in 2019, a 3.2 percent increase over 2018. The number of travel and tourism jobs increased to 1.2 million last year, an additional 13,000 jobs. Travel-generated tax revenue also grew for the 10th straight year, providing $12.2 billion to state and local governments, a 3.4 percent increase over 2018.

 

“The data show just how vital tourism is to the California economy and why it must be restored when we control and ultimately overcome this deadly outbreak,” said Caroline Beteta, president and CEO of Visit California, the state’s tourism marketing non-profit organization. “When that time arrives, we’ll be calling on Californians to become the main drivers of recovery by traveling in the state, shopping locally and visiting local restaurants, wineries and attractions. California has led the nation in its response to the health crisis, and it will lead the economic comeback.”

 

Travel-related economic losses from the pandemic have been hardest on tourism workers, rural destinations in which tourism dominates the economy and hundreds of cities that use hotel taxes to fund basic municipal services.

 

In 2018, according to the Dean Runyan report, tourism made up more than 10 percent of the labor force in 15 California counties. For example, more than half the workforce in Mono County is attributable to tourism.

 

Nearly every California city – 482 to be exact – levied hotel taxes in FY17-18 that raised nearly $2.6 billion for municipal services. That’s money for police and fire and most of the general government functions cities take on. Across California, 68 cities count on TOT revenue to cover at least 20 percent expenditures.

 

Tourism is one of the most labor-intensive economic sectors and creates jobs faster than other sectors of the economy. During the Great Recession, overall California employment fell 8.6 percent between 2008 and 2010, while tourism jobs dipped only 5.6 percent.

 

Release of both economic reports coincides with the start of California Tourism Month. Established by legislative resolution in 2016, tourism month each May recognizes the major contribution travel and tourism makes to California’s economy.

 

“Tourism in California will rebound, because it always has -- after earthquakes, wildfires, the 9/11 terrorist attacks or economic crises,” Beteta said. “Californians are proud and resilient people. They love their state, and when the time is right and they are ready to travel, the California travel industry is here to welcome them.”

 

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ABOUT VISIT CALIFORNIA:

Visit California is a nonprofit organization with a mission to develop and maintain marketing programs – in partnership with the state’s travel industry – that keep California top-of-mind as a premier travel destination. For more information about Visit California and for a free California Official State Visitor's Guide, go to www.visitcalifornia.com. For story ideas, media information, downloadable images, video and more, go to media.visitcalifornia.com.