With the U.S. economy becoming stormier and stormier, The City’s tourism industry has shelter in its Moscone Center and the huge groups expected to come to town, meet and spend their money in city restaurants and shops.
In 2007, 59 groups such as Oracle reserved space in the Moscone Center and produced approximately 754,000 room nights in The City’s hotels at an average daily rate of $182.28, according to data from the San Francisco Convention and Visitors Bureau and PKF Consulting.
To date in 2008, only 48 groups are booked, but those groups have reserved 936,000 room nights. And the number of groups is expected to grow into the low 50s, said Leonard Hoops, the executive vice president of sales and marketing with the Convention and Visitors Bureau.
That forecast is a step down from what tourism experts in The City previously thought, Hoops said. Earlier in 2007, many expected 2008 to be a “banner year” but that has been subdued given the U.S. economy’s outlook and a recession on the near horizon, he said.
But even with the reduced projections, tourism, through The City’s approximate 14 percent hotel room tax, is expected to be one of the few bright spots for city coffers.
The City is expected to reap nearly $13 million in surplus revenue during the fiscal year that ends June 30, according to the Controller’s Office mid-year report. Projected at the beginning of the fiscal year to bring in nearly $149 million dollars in revenue, the hotel room tax is now expected to bring in nearly $162 million, second only to property tax revenue, according to the report.
Ted Egan, The City’s chief economist, said the increased projection is based on the “weak” U.S. dollar, which makes it more affordable for foreign tourists to travel to the already popular City by the Bay for vacation.
Visitors to The City spent roughly $7.76 billion here in 2006, according to the Mayor’s Office.
“We know that in these uncertain times, tourism is one of the most dependable engines fueling our economy,” Newsom spokesman Nathan Ballard said.