Tourism crucial to state’s economic health

The Golden Gate Bridge by night.

Summer is synonymous with California: The sunshine, abundant natural wonders, endless recreation activities, unrivaled attractions, and sheer beauty of the state make it a perfect place to enjoy the freedom and fun summer brings. California’s appeal is universal and its spirit unmatched. It is the stuff songs are written about.

As another California summer ends, we return to the routine of fall with fresh appreciation for the many gifts our state has to offer. But the great news is that we are not the only ones who find the California experience irresistible – visitors boost our economy and create jobs for Californians.

What we all love about California is what makes it a top travel destination for a growing number of international travelers.

Every year, California attracts more than 200 million visitors – from all over the United States and the world – who want to share in the prospects for inspiration, economic success, or simply to soothe their souls. Last year, visitors to California spent $106.4 billion in the state, generating close to 1 million jobs and $6.6 billion in local and state tax revenue, according to a recent travel and tourism industry report. Without this contribution, each household in the state would have to pay an additional $890 in taxes each year.

That report, prepared by Dean Runyan Associates, details the economic impacts of travel to and through California from 1992 to 2012. It found that the number of visitors to the state has continued to increase, and the travel industry has expanded for the third consecutive year following the 2007–2009 recession. According to the California Chamber of Commerce, travel and tourism is one of only a few sectors of our economy that is growing steadily.

What we all love about California is what makes it a top travel destination for a growing number of international travelers.

In 2012, nearly 15 million international visitors came to California – a jump of 25 percent from 2009 – and that number is projected to increase another 5 percent this year. Much of this growth is fueled by an increase in visitors from China, which became California’s largest overseas market last year and third in total international volume behind only Mexico and Canada.

Growth in international visitors significantly impacts the industry’s bottom line. Although international visitors represent only 6 percent of total California tourism, they account for 19 percent of total spending because they stay longer and spend more. Total spending by international visitors is expected to reach $21.6 billion in 2013, up 7 percent over 2012. That amount equals the combined value of the state’s top four product exports – civilian aircraft, computer parts, non-industrial diamonds, and voice/image/data equipment.

Although tourism is big business for California, it can be overlooked as a key driver of California’s economic recovery and success.

Business from domestic travelers is robust as well. Approximately 52 million residents from other states visited California last year and spent more than $42 billion, while Californians traveling within the state accounted for another $37 billion in tourism spending.

Travel and tourism is an economic engine that creates jobs and supports public services in every corner of our state. The Runyan report shows rural counties gain as much from tourism as urban areas do. In fact, travel is especially important to these areas, because manufacturing and traded services are less prevalent. Moreover, counties with less total employment have a bigger share of travel-generated employment.

Although tourism is big business for California, it can be overlooked as a key driver of California’s economic recovery and success. But, certainly, the numbers tell a different story. Public leaders must understand the benefits of travel and tourism and support the industry to ensure that it remains a strong economic engine for California.

San Diego learned this the hard way when an agreement wasn’t signed but needed to release marketing dollars to fund an advertising campaign to promote the city as a tourist destination.  As a result, research shows that San Diego County hotel revenues grew just 2 percent through the end of June, compared with growth rates of 7 percent to 11 for the region’s rivals in Los Angeles, Anaheim and San Francisco. In Colorado in 1993, residents learned a painful lesson when they cut the state’s $12 million tourism marketing budget to zero. Within two years, the state had lost 30 percent of its market share of U.S. tourism. The state’s revenue loss quickly accelerated to more than $2 billion every year – all for a “savings” of $12 million.

In California, private businesses that make money from travel – like hotels, restaurants, attractions, transportation companies, and car rental companies – assess themselves to fund Visit California. This statewide marketing program promotes California leisure travel nationally and internationally, selling the California dream to millions of consumers around the world and creating within them a desire for the California experience. And Visit California’s efforts pay off: Every advertising dollar spent last year generated $358 in additional tourist spending, and $25 in tax revenue for state and local public services.

This kind of return on investment should not be overlooked, or taken for granted, by any of us, particularly those who set policy for the state. So, as we reflect on our California summer memories, remember just how lucky we are to live in a state that benefits us in so many ways.

Ed’s Note: John A. Pérez is the speaker of the state Assembly. Assemblyman Ian Calderon, D-Whittier, chairs the Committee on Arts, Entertainment, Sports, Tourism and Internet Media. Caroline Beteta is the president and CEO of Visit California.

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