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Inflation is at the highest point in over 40 years, the finance and tech sectors are suffering from a significant economic downturn, and the city’s tax base appears to be on a collision course with an iceberg.
These are the realities in San Francisco — and many economic forecast seminars indicate that the economy won’t come back fully until 2025. If we don’t act now, we are in for a bumpy ride.
There is a solution. If we double down on tourism, we can save our city.
To understand the importance of tourism, one must first look at the numbers. In 2019, prior to the pandemic, San Francisco welcomed more than 26 million visitors, who spent over $10 billion in our local economy. That spending generated over $819 million in taxes and fees for our city’s general fund, the majority coming from the hospitality industry. The industry employed more than 86,000 people in San Francisco and the Bay Area.
Additionally, unlike some sectors of our economy, tourism is a “consensus” industry: We all benefit when tourism does well. Specifically, it benefits our workers, our tax base, our restaurants, small businesses and it gives San Franciscans something to be proud of. The tax money we get from tourism pays for critical city services and programs.
Tourism in the modern era is significantly impacted by the global economy and geopolitical realities. When energy and food costs go up, or when a foreign country limits travel here, tourism is negatively impacted.
That is particularly why we must be proactive and surgical with our efforts to enhance tourism.
The good news is we have recently seen some steps in the right direction, particularly as it relates to cleanliness, public safety and with workers coming back to the office. Tourist destinations such as Union Square and Fisherman’s Wharf are noticeably cleaner and safer than they were last year. City leadership, Business Improvement Districts (such as the Union Square Alliance), the hospitality industry and the broader tourism industry have collectively taken collaborative efforts to push forward with this positive momentum.
The most obvious example of that collaboration was the recent Dreamforce convention, where everything went incredibly well and gave San Francisco the opportunity to show the world that it is open again for large-scale conventions. In fact, speaking to people visiting the convention from other cities was eye-opening. Many people indicated that our city was in better shape than what they had seen in the news, and in some situations, in better shape than their own respective cities.
Nonetheless, there are still numerous challenges we all see daily on our streets and much more work to do.
Mayor Breed’s recent expansion of the Street Ambassador program is a good step in the right direction. We need to take additional action to ensure that the street conditions within the 1-mile radius around Moscone (the city’s convention center) are among the best in San Francisco. Although easier said than done, that requires increased resources dedicated to safety and cleanliness. It also includes low-cost improvements, such as an upgraded street sign system to help pedestrians get to Moscone.
We also need to start encouraging people to visit our city. In fact, now that Union Square is in noticeably better shape than last year, we can all help by visiting this holiday season (much like how people did before the pandemic).
Additionally, we have a special opportunity to change the trajectory of our city’s recovery if we continue to act in the coming year. San Francisco will have a competitive advantage to attract environmentally conscious tourists, because starting in January, we will be the most environmentally sustainable tourism destination in the country. The hospitality industry in San Francisco will be making massive strides in using renewable energy, expanding electric vehicle charging options, and producing close to zero waste. January is also when we have our JP Morgan Convention, a chance again to work collaboratively to ensure that the city’s tourism industry starts the year off right.
Our city has some of the most beautiful parks and views in the world. In fact, we recently made National Geographic’s top 25 best worldwide destinations for travelers. We have some of the best restaurants, coffee, and wine anyone could ask for. We just need to keep pushing forward on the recent positive momentum to reap greater rewards.
Some people left San Francisco during the pandemic, but many of you stayed. You stayed because this is your home, and because in some capacity, you believe in the magic of San Francisco.
As a native San Franciscan, I too believe in this city. It is why I moved back to the city from LA, even though I loved it there, even though where I lived there — Glendale, CA — also felt like home. Unlike the people who left San Francisco due to its challenges, I came back at this pivotal moment because I chose to bet on our city and its tourism industry.
I hope our city does the same — and doubles down on that bet as well.
Alex Bastian is the President and CEO of the Hotel Council of San Francisco.
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