Tourism slump expected for at least another two years
As Memorial Day officially kicks off summer, local business and tourism officials are crossing their fingers, hoping that tourists show up.
Santa Monica, which has enjoyed year-long tourism cycles, has had a steep drop-off in sales tax revenue and hotel occupancy rates stemming from the recession and the fall-off in travel after Sept. 11.
In response, city tourism officials have begun an aggressive advertising campaign targeting countries where most of the city’s visitors originate.
According to a recent study, most of Santa Monica’s tourists come from the United Kingdom, Australia, New Zealand, Western Canada, France, and Japan — even though Japanese tourists have fallen off quite a bit from before.
“South America was an emerging economy for us last year,” said Debbie Lee, communications manager for the Santa Monica Convention and Visitors Bureau. “But South America’s economy has weakened quite a bit and this year the UK’s market is much stronger and they are probably the ones we are going to target.”
The survey also has provided tourism officials with cultural information about each country’s tourists and what they are looking for in a vacation.
“For example, the German market is really hot on soft adventure,” she said. “They come here to hike in the Santa Monica Mountains, rollerblade, bike and surf.”
The tourism bureau is opening a visitor’s booth at Santa Monica Place in June. Officials hope tourists will find information about attractions on Montana Avenue, Main Street and the city’s museums, which may prolong their stay.
“Our hopes are with this new center we can offer comprehensive visitor services so that we can give information to tourists on the entire city of Santa Monica and give them ideas they may not already heard of,” Lee said. “And with that information we hope they will extend their stay and spend their money not just in one area but in the various areas of Santa Monica.”
Hotel managers say their room bookings are still about 10 percent below compared to where they were last year. In order to stay competitive, many have had to slash their rates by more than 20 percent.
Larger luxury hotels are feeling the pinch from the fall-off in tourism far more than smaller budget hotels, officials said.
“The wave of tourism has come very late this year,” said Francios Khoury, general manager of the Doubletree Guest Suites Hotel on Fourth Street. “So much so that it is very unclear what kind of season we will have this year. It’s unusual in that way.”
“The wave of tourism has come very late this year. So much so that it is very unclear what kind of season we will have this year. It’s unusual in that way.” — — FRANCIOS KHOURY, General Manager Doubletree Guest Suites Hotel
Khoury said there wasn’t much the hotel can do to soften the blow of a potential drop-off in tourism.
“We are preparing cautiously at this point,” he said.
Typically, the city’s tourism industry brings in about $500 million a year. But city officials believe this year’s sales tax revenue will be a steep decrease from previous years. The city is hurting from a $8.8 million shortfall in sales tax revenue last year.
And officials said the trend could become worse, even if the hotels fill their rooms. As the hotels lower their room rates, the city makes less in taxes on each room.
“Travel, barring no other terrorist activities or those out of our control, should get back to normal by 2003,” Lee said.
Tourism experts are predicting Santa Monica won’t see a return to tourism levels that peaked in the summer of 2000 for another two or three years.
Officials said they also will be keeping a close eye on business travel, which made up a huge segment of the city’s tourism.
“Before 9-11 much of the travel was corporate travel, and we saw a shift after that and with the economy the way it was, we saw a lot of business travel decrease,” Lee said. “But my understanding is that the ratio of corporate travel versus leisure travel has remained the same, the numbers are just much lower.”
Originally published in the Santa Monica Daily Press print edition on May 28, 2002. Read the original PDF.