San Francisco tourism industry remains in slump

As tourism in San Francisco begins to rebound, The City is still struggling to lure business travelers who are considered the big spenders.

Spending among business travelers typically accounts for roughly 30 percent of the $8 billion tourism market in San Francisco — which is the No. 1 industry in The City.

The number of business people visiting The City has continued to drop by as much as 20 percent to date as fewer travelers land in San Francisco to make business deals.

The number of business travelers has steadily declined, while traveling for pleasure has made a slight comeback, now accounting for half of the travel market, according to the San Francisco Convention and  Visitors Bureau.

San Francisco banks heavily on business travelers — who come with company credit cards in hand — to spend money, said Joe D’Alessandro, executive director of the San Francisco Convention and Visitors Bureau.

“Of all travel segments, they are the biggest spenders — they are the ones spending with expense accounts,” D’Alessandro said. “So the reduction has really impacted hotel rates, which are still down.”

The national unemployment rate is still hanging at 9.5 percent. Many companies have not only put a freeze on hiring, but also cut their travel expenses, D’Alessandro said.

Mayor Gavin Newsom also pointed to other struggles in the tourism industry in San Francisco, including ongoing hotel labor disputes and a November ballot measure — Proposition J — that could increase the hotel tax.

Measure J would increase the hotel tax in San Francisco by 2 percent, bringing it to 17.5 percent — the highest in the nation.

As for the labor disputes, which have been ongoing for the last year, Newsom says it is something that is on the radar.

“We have the looming prospect of targeted strikes of the hotels,” Newsom said. “We are all prepared for it and we recognize it’s an issue.”

Critical funds

Tourism is one of the largest moneymakers for San Francisco.

$426 million: Taxes generated for thecity of San Francisco
66,837: Jobs supported in San Francisco
$1.86 billion: Total payroll
125,407: Visitors in San Francisco on an average day  
$21.5 million: Visitor spending in San Francisco on an average day

Source: S.F. Convention and Visitors Bureau

esherbert@sfexaminer.com

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