Tourism took a hard hit in 2009. Will 2010 be any better?
With spring on our doorstep and summer soon to follow, Santa Cruz is once again entering tourist season. While not a favorite time for some residents, the City of Santa Cruz hopes to see more tourists heading here from over the hill or up the coast on Highway 1 into town as the days increase in length and the sun begins to peek from behind the clouds. The travel sector is counting on this summer to be stronger than the last, which recorded a 7 percent decrease in hotel occupancy and a 10 percent decrease in rates compared with the previous year.
Partly in response to the hit local tourism has taken, Rep. Sam Farr (D-Calif.) introduced a bill to congress earlier this month that would authorize $10 million in federal grant money for tourism projects across the country. The Travel Regional Investment Partnership (TRIP) Act would allow communities across the U.S. to apply for federal competitive grants ranging from $100,000 to $1 million in size.
For hotel owners, the proposed bill could not have come at a better time. According to the Santa Cruz County Visitors Council, 2009 hotel occupancy rates were down 17 percent from the year prior. “Part of the problem is that that wasn’t the first year of decline,” says Maggie Ivy, CEO of the Visitors Council. “We ended the year with [an average] 51 percent hotel occupancy, which is the lowest occupancy we’ve seen on record since I’ve been here, and I’ve been here 15 years. It’s a significant drop.”
Farr has served as the co-chair of Congressional Travel and Tourism Caucus, which currently consists of more than 100 members of congress, since 1997. Farr hopes the TRIP act will give economies like those in Santa Cruz and Monterey counties the jumpstart they need.
“He’s long been a supporter of tourism as a vehicle to drive economic recovery and create jobs in our area,” says Tom Mentzer, Farr’s press secretary. “That’s the reason he’s become such a champion of travel and tourism, both in his time here in congress and his time in the assembly earlier.”
The specifications for which projects will qualify for funding under the TRIP act will have to be worked out by the Department of Commerce if the bill passes. Ivy can already think of one place where the resources might be well spent: In a recent study by the Visitors Council, 83 percent of respondents said that their primary information source for planning trips was the Internet. Ivy says that the local tourism industry could benefit from more Internet resources and online advertising.
At $2 billion a year, tourism is the 17th District’s second biggest industry after agriculture at $4 billion. In the City of Santa Cruz, tourism is number one, making for a $600 million dollar a year industry. The SCC Visitors Council reports that every dollar invested into their annual budget for tourism resulted in $10 generated in local sales and hotel occupancy taxes.
Mentzer says that tourism supports and represents “a whole range of different industries,” including hotels, restaurants, aquariums and the Santa Cruz Beach Boardwalk. “When people come and visit, they’re not just putting money in one particular business,” he says. “They’re spreading it all around, and they’re creating jobs throughout the economy.”
However, one of biggest challenges facing the local tourism industry is getting more visitors to stay overnight. Currently, 75 percent of Santa Cruz visitors come from Northern and Central California—nearby regions that allow tourists to come just for the day. If more of these visitors were inclined to stay overnight, an increase in hotel occupancy could have tremendous benefits for the Santa Cruz economy at large. Regardless, the Travel Industry Association reports that tourism, overall, may not begin to see significant improvements until 2011.
“Tourism is so interconnected in the community,” says Ivy. “If someone is staying in a hotel, they’re purchasing meals at the restaurant, they’re buying things at the beachfront stores, and then those businesses are purchasing advertising … They’re employing people. So, it definitely has an enormous domino effect within our entire local economy.”