Tourism industry recovering

San Francisco's top revenue-generating industry, tourism, is on a “remarkable” upswing, Mayor Gavin Newsom announced Friday.

In 2005, San Francisco counted more than 15.7 million visitors, an increase of 620,000 tourists from 2004. The collective amount of visitor spending in that same time frame was $7.3 billion, up 9.5 percent from the previous year.

San Francisco's popularity is good news for the local economy, said John Marks, president of the San Francisco Convention and Visitors Bureau, not just the tourism industry.

The Convention and Visitors Bureau estimates that the industry generates $418 million in taxes and fees and directly supports 66,315 jobs. Last fiscal year The City's hotel tax generated $108 million for San Francisco's operating budget. For FY 2005-06, it's projected to bring in $125 million.

Nonetheless, San Francisco still hasn't completely rebounded from the rapid loss of business travel and tourism following the Sept. 11, 2001 terrorist attacks and the dot-com bust, said Marks. Visitor volume was 17.3 million in 2000, but by 2001, more than 3,000 hotel workers in The City had been laid off or began working reduced hours, according to the visitor's bureau.

“We have not quite reached the level of the robust benchmark year of 2000, but we're sure gaining on it,” he said, joking that, along with the SARS outbreak, “the only thing that passed us by is locusts and darkness.”

San Francisco's tourism market is about evenly supported by three different sectors: leisure travelers, convention attendees and business travelers who come in for meetings and the like. Usually considered a “three-legged stool” of support, since 1999 business travel has not rebounded, as have the leisure and convention categories. While it carried 29.2 percent of the market in 1999, business travel accounted for only 22.1 percent of tourism in 2004, according to The City's visitor's bureau.

Dan Goldes, a vice president with the visitor's bureau, said the loss of some businesses in San Francisco has reduced business travel to The City.

“That travel is important because those visitors generally pay higher hotel rates [bringing more revenue into the city] and many of them convert to leisure travelers by tacking on extra time in the destination since the company has covered the air and at least some of the accommodations,” said Goldes.

San Francisco's popularity with overseas travelers is evidenced by recent rankings released by the U.S. Department of Commerce. The City by the Bay ranked as the third most popular destination in the United States, after New York City and Los Angeles.

Worldwide, San Francisco is ranked within the top ten tourist destinations, according to federal data, with Sydney, Australia taking the number one spot.

“We're going to take Sydney out,” said Newsom, jokingly adding, “in a competitive and appropriately spirited way.”

beslinger@examiner.com

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