As the crowds at the coast attest, San Diego’s tourism industry is prospering. While the number of out of town visitors at our beaches is sure to make it harder to find a parking spot and frazzle a few nerves, it is worth noting the tremendous economic value that tourism brings to our region and the important contribution visitors make to the balance sheets of local government.
The number of visitors staying overnight in San Diego reaches a peak each year this month. Last year, 1.8 million overnight visitors and another 2.4 million “day” visitors came to San Diego during July and spent an unprecedented $862.7 million at area businesses. This spending is not limited to restaurants, lodging and entertainment venues. On top of the one out of every eight jobs at companies directly involved in the visitor industry, tens of thousands of more jobs in other industries are also supported by tourism. These include those that service visitor businesses, such as accounting and advertising firms, web designers (one of the top business uses for the web is for visitor related purposes, including booking air travel, hotels, rental cars, and information on areas to be visited), construction companies building hotels, and food, printing and paper suppliers.
While tourism is clearly a good thing for San Diego, the visitor industry is often criticized for allegedly creating only entry-level, low-paying service jobs, and providing little opportunity for growth and advancement. Skeptics go onto claim that the industry contributes little to the region’s economic prosperity, while investment efforts to support the industry are seen as unjustified subsidies.
However, a closer look reveals reality is far different.
Although “service” jobs are plentiful in the tourism industry, as they are in many business service sectors (such as retail and health care), many are well-compensated professional workers representing a wide spectrum of work in management and skilled professions (such as gourmet chefs, airline pilots, and hotel executives). Many young adults in San Diego find their first formal paid work with visitor related businesses. The visitor industry is also one of the few business endeavors offering seasonal and part-time work for full-time students.
Moreover, critics often overlook the career ladders and opportunities available in the industry. These jobs prepare entry-level workers for more responsible positions by teaching basic workplace skills, including earning and managing money, taking directions from superiors, working together as teams, and keeping customers happy. Promotions from within are common, making the visitor industry an economic sector where it is possible to advance to upper management after starting in an entry-level position.
In addition to the importance to the region’s economic health, the visitor industry provides tremendous benefits to the bottom line for municipalities throughout the region. In FY 2006, the City of San Diego collected nearly $136 million in room taxes. It was the third largest source of revenues for the City and, by far, the fastest growing. The revenues help support hundreds of arts programs, maintain beaches and parks, and support infrastructure projects throughout the City.
Following the old adage of reinvesting wisely lest one kill the goose that lays the golden egg, smart cities choose to reinvest the revenues raised through hotel taxes back into tourism development and promotion, such as convention centers, cultural programs, welcome centers and travel-related marketing. A Travel Industry Association study of major travel destinations found, however, on average only 37 percent of city hotel tax revenues are reinvested into travel and tourism.
Astonishingly, despite the impressive performance of the visitors market and importance to the local economy, over the past three years, the City of San Diego cut the San Diego Convention and Visitors Bureau budget from $13.9 million in fiscal 2003 to $8.8 million in fiscal 2006.
We should not assume the visitor industry will continue to thrive without considerable marketing and promotion. The tax applied to hotel guests was specifically designed for the express purpose of “promotion of tax-generating travel, tourism and convention activities.” It should be spent as an investment paying for itself as more visitors underwrite greater local investment and even more revenues are collected. This is a good example of government investment in market-driven, supply-side economics.
Let’s not let the hassles of finding a parking spot this weekend get in the way of understanding the importance of the industry to our region. These guests and their spending greatly contribute to our highly regarded quality of life, bringing economic benefit, jobs, maintaining the environment, beautifying the community, and making San Diego County a better place for all of us to live. And those are more than just sunshine dollars.
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