California’s Tourism Economy Improved, Still Fell Short in 2021

California’s Tourism Economy Improved, Still Fell Short in 2021

Lombard Street, San Francisco, California. (photo courtesy of Collette)

May 1 will not only bring about the start of National Travel and Tourism Week, it’ll also kick off California Tourism Month, a statewide celebration of all that the Golden State has to offer as a destination.

Ahead of the occasion, Visit California has just released a new report, prepared by Dean Runyan Associates, which details tourism’s economic impact in California for 2021. While last year brought an almost 50-percent increase in visitor spending, the overall results of the research reveal that the sector’s recovery is still quite far from complete.

Especially in California’s gateway cities—like San Francisco and Los Angeles—travel and hospitality sector revenues continue to fall conspicuously short of pre-pandemic figures. Much of the cause can be attributed to ongoing global travel restrictions and U.S. entry requirements, since these major urban centers typically draw many international travelers, as well as domestic visitors. International tourism spending had, in fact, been California’s largest export prior to the pandemic.

Some key findings from the 2021 economic impact report:

— In 2021, visitor spending in California reached $100.2 billion, a 46-percent increase over 2020.

— Tourism-generated tax revenue for state and local governments grew by one-third, to $9.8 billion last year.

— The state’s tourism jobs, half of which disappeared in 2020 at the onset of COVID-19, were making their way back slowly in 2021, increasing 6.4 percent to 927,000.

— California visitor spending, which had reached record-setting levels in 2019, came in at 69 percent of those pre-pandemic figures. In only one of the state’s 58 counties, northwest California’s rural Trinity County, did visitor spending exceed its 2019 record.

— Iconic urban destinations, which are home to the majority of California’s hotels, restaurants and tourism attractions, are experiencing a particularly slow recovery. For example, San Francisco saw $6.1 billion in visitor spending in 2021, amounting to only 43 of the $14.2 billion recorded in 2019.

— Revenue from international visitor spending in 2021 was still drastically below pre-pandemic figures, reaching just $5.4 billion in comparison to nearly $28 billion in 2019.

California’s Tourism Economy Improved, Still Fell Short in 2021

Graph displaying California’s 2021 tourism recovery levels. (image via Visit California)

“After a devastating 2020, visitor spending is on the stairway to recovery, but we still have a long way to go,” said Caroline Beteta, Visit California’s president and CEO. “Cities continue to suffer without the critical international and group business segments.”

In efforts to reignite business travel, Visit California has launched various initiatives to promote the return of professional meetings and events in California, with the help of some state-approved stimulus funds in mid-2021.

In February, the state’s tourism marketing organization launched a new domestic brand campaign, called “Am I Dreaming?”, to the tune of $22.1 million, which will continue throughout May. It premiered as a television spot during the Super Bowl pregame show to critical acclaim.

California’s Tourism Economy Improved, Still Fell Short in 2021

California’s 2021 progress toward economic recovery, mapped out by county. (image via Visit California)

When the state’s border reopened in November 2021, the organization reestablished marketing programs in several international source markets, including Mexico, Canada, United Kingdom, France and Germany, in hopes of inspiring overseas travelers to choose the Golden State for their first post-pandemic long-haul vacations.

Projections produced by Tourism Economics and released by Visit California earlier this year prophesied that the state’s travel spending would reach $144.6 in 2023, bringing it nearly equal with 2019. If that reveals itself to be the case, California’s tourism economy will have recovered to pre-pandemic levels a whole year earlier than was predicted last year. New projections also forecast California’s 2024 travel spending at $155.9 billion.

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