> ## Content Index > Fetch the complete content index at: https://www.smdp.com/llms.txt > Use this file to discover other available public pages before exploring further. # Tourism: RAND finds Santa Monica hotels filling rooms but earning less - URL: https://www.smdp.com/tourism-rand-finds-santa-monica-hotels-filling-rooms-but-earning-less/ - Published: 2026-10-01T23:30:00.000Z - Updated: 2026-10-01T23:30:00.000Z - Author: Matthew Hall - Tags: Business, Santa Monica Santa Monica's hotels are filling rooms at a higher rate than their regional competitors, but they are taking in less money to do it, and the city's broader tourism economy has lagged its neighbors since the pandemic, according to a new RAND Corporation study. The report, "Santa Monica's Recent Economic and Social Trends: A Case Study with Regional Comparisons," found that Santa Monica's hotel occupancy reached 76% by March 2026, the highest of any hotel submarket the researchers examined. The comparison group included the combined West Hollywood-Beverly Hills submarket, the Los Angeles International Airport submarket that includes Culver City, downtown Los Angeles, Santa Barbara and San Diego. None of the submarkets has returned to its pre-pandemic occupancy rate, the authors wrote. The rebound followed one of the steepest drops in the region. At the February 2021 low point, Santa Monica's occupancy had fallen to 38% of its 2015 level, second lowest among the submarkets, while Santa Barbara's fell only to 63%, according to RAND. Santa Monica climbed back to within 10% of its 2015 occupancy by September 2022 and stood at 93% of that level in March 2026. Revenue tells a different story, the researchers concluded. Using transient occupancy tax data from the California State Controller's Office, RAND found that inflation-adjusted short-term lodging revenue in Santa Monica initially recovered by fiscal 2022 and then began a gradual decline. Beverly Hills followed a similar downward path, while Culver City and West Hollywood took in more real revenue in fiscal 2024 than in fiscal 2017\. The authors said the gap between rising occupancy and falling revenue suggests Santa Monica hotels have cut prices in real terms to fill rooms, a practice that may be helping sustain spending at shops and restaurants. RAND also found that the city's tourism sector as a whole has underperformed. From 2019 through 2024, the number of tourism-related businesses in Santa Monica declined by 1% to 2% a year on average, apart from a small increase in 2021, while the comparison cities mostly grew, some by as much as 8% in a year. Santa Monica had the weakest tourism employment growth of the four cities in three of the five year-over-year periods studied. In 2024, tourism employment in the city fell about 16%, compared with a 5% decline in West Hollywood, the best performer that year. Annual visitors stand at 58% of a pre-pandemic baseline of 7.5 million, according to city staff cited in the report, after bottoming out at roughly 25% in 2020\. The authors said nationwide declines in U.S. tourism since 2025, especially among Canadian visitors, have likely weakened the recovery. They noted that their data do not capture the 2026 FIFA World Cup, when Santa Monica hosted six weeks of special events that drew hundreds of thousands of visitors, activity that "may mark a break with the recent downward trend." Taxes are another factor. Santa Monica has the highest city tax rates among many tourism-oriented Southern California cities, RAND found, including a 15% hotel occupancy tax, a 17% home-share tax and an 18% tax on private parking, compared with 14% hotel taxes in Beverly Hills and Culver City. A hotel-industry interviewee told researchers the taxes matter less to individual tourists than to conference planners booking large blocks of rooms when rates in Laguna Beach or Newport Beach run 20% to 30% lower. City staff said a high local minimum wage and hotel-worker wage and benefit requirements may also put Santa Monica at a disadvantage. The study combined data analysis with interviews. Researchers Jason M. Ward, Roland Neil and Lizhong Liu compared Santa Monica with Beverly Hills, Culver City, West Hollywood and, in some analyses, other Southern California markets, drawing on CoStar hotel data, state transient occupancy tax records, DataAxle business and employment data and state sales tax data. They also conducted semi-structured interviews from March through August 2026 with 14 of the 19 people they invited, including city staff, current and former elected officials and a candidate, business owners, attorneys, architects and a developer. The authors describe the work as descriptive: it cannot establish causation, did not analyze tourist visitation trends directly and centers business and development perspectives. The study was funded by gifts from RAND supporters and income from operations. The Rand report mirrored earlier data provided by local officials as part of the annual tourism report. Santa Monica Travel and Tourism have previously reported that the Covid era shutdowns reduced tourism in the city by about 76% and while there were incremental gains over time, the total actually dropped in 2025 and the city reported less than half as many visitors compared to 2019. In the 2025 report, spending rose 9% to $996.6 million as visitors spent more per day, according to Santa Monica Travel & Tourism. Lodging tax revenue fell 13% to $54.4 million. Day-trippers made up 88% of visitors, up from 77% in 2023, but generated only 27% of spending, and the number of hotel guests fell 21%. U.S. visitation fell 17%. Santa Monica's 8% visitor decline was steeper than the roughly 1% dip in Los Angeles, which drew 49.5 million visitors in 2025\. SMTT projected hotel revenue would top $400 million in 2026, putting it on track to surpass pre-pandemic levels in 2027. RAND recommended that the city pursue several low-risk ways to draw more visitors and foot traffic, including more festivals, events and other activities, building on World Cup events and the planned but eventually delayed Ocean Way Festival. The inaugural festival was canceled in mid-September because of storm surf and runoff from Hurricane Marie. The authors also suggested filling vacant space with temporary "pop up" stores, pursuing larger redevelopment projects such as the Civic Auditorium as an anchor for foot traffic, and actively courting employers in sectors where the city could grow. They urged the city to expand its new business concierge service and to comprehensively review its recently adopted right-to-rehire and labor peace law for businesses on city-owned land, including the Santa Monica Pier, citing "substantial concerns" from city staff and business owners.