Tourism is BIG BUSINESS for San Diego
By Joanne DiBona, Communications Director, jdibona@sdcvb.org
National Tourism Week, celebrated annually across the country this week, can be considered the “Fourth of July” of the visitor industry.
This is the time of year when the visitor industry gets together to remind the nation of the fact that travel and tourism is more than just a “glamour industry.” It is business--big business. In fact, it is the backbone of the economy for many communities across the nation, San Diego being no exception.
Just how big is this contribution? Travel and tourism—encompassing transportation, accommodations, catering, recreation and services for travelers—is actually the world’s largest industry and generator of jobs. It is the nation’s third largest retail sales industry and one of America’s largest employers.
In fact, one out of every eight people in the U.S. civilian labor force is directly or indirectly employed in travel and tourism. Each day in the U.S., tourists spend $1.4 billion, which translates to $60 million an hour, $1 million a minute and $17 thousand a second, according to the Travel Industry Association of America’s calculation!
For San Diego County, the economic impact of travel and tourism is just as dramatic. In 2003, 26.4 million visitors poured $5.3 billion into the local economy, making the visitor industry San Diego's third-largest, following manufacturing and the military.
In fact, San Diego hotel occupancy ranked third in the nation last year, according to a report released recently by Smith Travel Research (STR) that listed occupancy levels for the top 25 national markets for calendar year 2003.
This year’s observance of National Tourism Week has even greater significance locally, since it also marks the 50th anniversary of the San Diego Convention & Visitors Bureau. Back in 1954, ConVis opened its doors with a mission to market San Diego as a convention and vacation destination.
It’s hard to imagine what San Diego’s tourism industry was like back in 1954. While we don’t have any records from that particular year reporting the state of our visitor industry, we do have a copy of a San Diego Business Survey for the year 1961 published by the then Greater San Diego Chamber of Commerce. Under the heading “San Diego County’s Unique Economy” were categories listing the dollar value of locally manufactured products, Navy and Marine payrolls, and the revenues generated by the “tourist trade.”
The statistics tell an amazing story of the growth of the visitor industry in San Diego. In 1961, Lindbergh field reported a total of 883,000 passenger arrivals. In 2003, some 780,000 arrived in the month of July alone, part of the overall 7.6 million passengers who arrived here by plane last year.
An even more amazing statistic is that the total economic impact derived from tourism in 1961 was calculated at $161 million. In August, 2003, our visitors poured $618 million into the local economy in that one month alone. . .or almost four times the revenue produced the entire year of 1961!
Much has changed over the past five decades, but one thing has remained constant—the tireless dedication of the San Diego Convention & Visitors Bureau to aggressively market San Diego as a premier convention and leisure travel destination.
If San Diego’s national ranking and popularity are any indication, your convention & visitors bureau is doing its job extremely well. Just last month, the popular national travel magazine Travel & Leisure, ranked San Diego right behind Honolulu as America’s favorite city.
The magazine surveyed 500,000 readers asking them to rate 25 major destinations in a variety of categories important to travelers, from restaurants, nightlife and street scenes to historic and cultural attractions. San Diego took first place in numerous “best” categories: best destination for holidays & seasons; best place for outdoor activities; best destination for getting around by car; best destination to visit in spring and best to visit in summer; and the destination with the best parks and the best-looking people.
Leisure travelers and convention delegates not only leave billions of dollars in expenditures behind after their vacation or meeting is over. They also generate millions more in the form of transient occupancy tax (T.O.T) receipts.
Back when our ConVis office opened in 1954, a “bed tax” did not exist. It wasn’t until 1963 that the California Legislature passed a law granting local jurisdictions the authority to levy a tax on those occupying a hotel/motel room. The purpose of this tax was expressly for “promotion of tax-generating travel, tourism and convention activities.”
A year later, in 1964, San Diego adopted its own T.O.T ordinance, and basic formulas were established to provide the City Council with guidance on how to allocate T.O.T revenues. In 1966, the T.O.T. receipts (based on a 4% tax rate) resulted in $716,139 in revenue. By 1980 these receipts totaled a “mere” $10 million; in 1992 $45 million; in 1995, $57 million; and in fiscal year 2003, an incredible $108 million.
So what happens to these tax dollars, paid by tourists and convention delegates, not local San Diego taxpayers? A significant portion of the TOT is used to supplement the City’s General Fund and underwrite basic municipal services, such as road repair and park maintenance. These revenues also help fund cultural events, arts organizations and community-based programs throughout the city. In addition, the TOT provides funding to hire police officers for our neighborhoods, train firefighters and promote economic development.
And it doesn’t stop there. The TOT helps to maintain many of the amenities that are enjoyed not only by tourists, but also by San Diego area residents, such as Balboa Park, Mission Bay Park, and the Trolley. The TOT is also the source of funding for the expansion of San Diego’s enormously successful Convention Center, PETCO Park, which has changed the face of East Village, and the proposed central library.
So it is easy to see that visitors to San Diego benefit our local economy tremendously. In sum, tourism’s significant contributions to our local economy are quite clear. Not only does the industry pay for itself, it also provides a critical source of funding to underwrite programs and projects of primary benefit to San Diegans. Thanks to our region’s visitor industry, we all have much to be grateful for during this year’s National Tourism Week observance.
As we celebrate 50 Years of Achievement along with National Tourism Week, ConVis is proud to be at the forefront of our community’s hospitality sector. We are working diligently to ensure San Diego’s continued success and we are appreciative of the support provided by the local media, government and community for our efforts to position the greater San Diego region as a premiere convention and leisure travel destination.
