Tourism has long been a boon for San Francisco, providing more than $10 billion in annual sales tax revenues and supporting over 86,000 jobs. But the coronavirus brought the ordinarily steady flow of business, leisure and convention travel to a halt, causing a severe financial blow to The City’s budget.
Even as recovery from COVID-19 looms in sight, it could be as late as 2024 before tourism returns to pre-pandemic levels, according to industry expert projections.
“Every day we get more optimistic news about the decrease in COVID and the increase in vaccinations, so we’d all love to be wrong about that assessment,” said Kevin Carroll, executive director of the Hotel Council of San Francisco.
According to SF Travel, total visits to San Francisco declined by 61 percent in 2020, from roughly 26.2 million in 2019 to 12.9 million. Overnight visits were hit hardest, seeing a 73 percent drop, while day trips fell by about 53 percent.
In dollars, total travel spending declined by $7.5 billion, or about 78 percent from the year prior’s record high mark of $9.6 billion. This number excludes convention vendor fees.
Perhaps the most glaring indicator of the tourism industry’s hurt is hotel occupancy, which has been down at least 60 percent since the year before the pandemic. And because some occupants have included essential workers and vulnerable residents, the rate of tourist occupancy is likely even lower.
Karin Flood from the Union Square Business Improvement District said that of the group’s 50 hotels, less than 25 percent remained in limited operation at the height of the pandemic.
More than one-third of hotel business and 20 percent of earnings from San Francisco’s travel and tourism sector comes from conventions, the kind hosted at Moscone Center, which is currently being used as a mass vaccination site.
“Convention goers feed our local, small business economy,” said David Perry, a small business owner and member of the San Francisco Chamber of Commerce. “Until that returns, it’s going to be a challenge.”
There’s currently no timeline for when conventions will return, and when they do, it’s not a given that organizers will choose San Francisco as their host city.
Even before the pandemic, some sponsors were opting to hold their events in places such as Las Vegas or San Diego, citing high costs, potential safety issues and a perceived lack of street cleanliness.
Many business and leisure visitors spend time in iconic destinations such as Union Square and Fisherman’s Wharf. Businesses in those districts have been hurt especially badly by the drop in tourism.
At its worst, foot traffic in Union Square was down 90 percent from pre-pandemic numbers.
“San Francisco is a city of diverse neighborhoods and commercial districts. The heart of those are our local small businesses and, right now, they’re struggling,” Perry said. “Certainly, the increased level of vaccinations is cause for optimism, but it’s a very, very cautious optimism and one that doesn’t necessarily impact the bottom line for a small business.”
Recent pedestrian count data, however, indicates gradual improvement.
During the first week of March, weekday and weekend traffic was down 75 percent and 66 percent, respectively, from last year, a sign that people are trickling back and perhaps looking to spend.
As San Francisco plans to move to the state’s orange COVID-19 tier soon, allowing for increased indoor capacity at certain locations, tourism professionals believe weekend visits from Bay Area residents should slowly tick up, and visits from domestic visitors further afield are likely to follow come summer.
Industry folks also say there’s reason for optimism.
While hotel occupancy over President’s Day weekend was still at half of historic levels, it was the highest it’s been since the stay-at-home order was issued.
“It was an indicator that there is a real pent-up demand for travel since, during that weekend, there was still a restriction that only people living within 150 miles of San Francisco were allowed to travel for leisure,” Carroll said. “Also, frankly, the level of highway traffic shows that there is a general increase in activity in and around The City.”
Already, San Francisco seems to be slowly shifting gears in preparation for a more bountiful tourist season this year as compared to last.
Legislation to make permanent a version of the outdoor dining program, Shared Spaces, has already been introduced; the Golden Gate Park Ferris Wheel will spin for another four years; and the Powell/Hyde Cable Car line will be restored ahead of this year’s holiday shopping season.
“San Francisco is one of the most beautiful and dynamic cities on Earth. COVID didn’t change that,” Carroll said. “The future is bright and, frankly, I think the future will be here quicker than we thought.”