Earlier this year, Teipo Brown made a short presentation on Tourism in California and the Bay Area during the Covid pandemic. He had so much great information to share and the Club members wanted to hear more so the Club invited Teipo, a 20+ year resident of Castro Valley, back to share what is happening to tourism as California begins to loosen the Covid restrictions.Teipo started by sharing that pre-Covid tourism generated $145B spending in Calfiornia, but in the past year that figure has dropped to $59B - a significant drop with ramifications throughout the economy. Besides the drop in spending, Teipo shared that State & Local Tax Revenues have dropped from $12.3B to $7.4B and the number jobs in tourism have dropped from 1.2M to 682K. The figures supported Teipo assertion that the tourism has been extremely hard hit by the pandemic and only is starting to slowly recover.
During his presentation, Teipo shared airport and hotel statistics for the Gateway Cities (i.e., Los Angeles, San Diego, San Francisco Bay Area, Orange County). The number of people passing through the airports in January 2020 was 18M per month, but his rock bottom in April 2020 at 739K. The 2021 number ar not available yet, but appear to be improving compared to 2020. Last year, air travel saw a 65% drop domestically and a 75% drop internationally. The hotel industry experienced the same drops in the past year with occupancy and revenue dropping 35% statwide and 41% in Gateway cities; however, growth is projects in the coming year.
Teipo outlined the key drivers in the tourism industry:
(1) Leisure travel that is expected to grow due the easing of restrictions and pented up demand. People are feeling safe about shorter drive/fly vacations. (2) Corporate travel that is not projected to grow to companies moving out of Calfiornia, cost savings from working from home and the cancelation of meetings and conferences, and safety issues. (3) International travel which is not projected to grow and possibly decline until borders are opened, vaccinations are more wide-spread, and vaccination passports are established.
Touching on corproate meetings and conferences, Teipo pointed out that California lost $4.1B per month due to restrictions and cancelation. Since California was the last state to open to business meetings and conferences, many weree moved to other states. These meetings and conferences are a major source of revenue for hotels. Since it takes several months to several years to plan a business meeting or conference, this sector will return more slowly. Before answwering questions, Teipo concluded by noting conditions have improved since June 2020 and the projections for the industry are looking good at this time.
His presentation had a great deal of information presented in easy to read charts and table. Click here to watch the presentation.