A warning sign? Tourism in San Diego slows with hotels seeing fewer guests – San Diego Union-Tribune

San Diego Tourism Sector Faces Economic Stagnation, Impacting Sustainable Development Goals

Executive Summary

The San Diego tourism industry is experiencing a significant economic slowdown, characterized by declining visitor numbers, reduced hotel occupancy, and financial strain on local businesses. This downturn poses a direct challenge to the region’s progress towards several key Sustainable Development Goals (SDGs), particularly SDG 8 (Decent Work and Economic Growth), SDG 10 (Reduced Inequalities), and SDG 11 (Sustainable Cities and Communities). The end of the “revenge travel” boom, coupled with broader economic uncertainty, has led to a period of stagnation that threatens employment and the economic resilience of the local community.

Analysis of Economic Impact and SDG 8: Decent Work and Economic Growth

The current economic climate in San Diego’s tourism sector directly undermines the principles of SDG 8, which promotes sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. The industry, which employs approximately one in eight workers in the region (209,000 individuals), is facing a contraction that jeopardizes job security and economic stability.

Key Indicators of Economic Decline:

• Local businesses, such as Action Sport Rentals, report revenue declines of 17-18% compared to the previous year.
• Business owners are resorting to unprecedented promotional activities to stimulate sales, indicating severe market pressure.
• The forecast for the upcoming year is stagnant, with business owners hoping to merely break even rather than achieve growth.

This stagnation in a primary economic sector represents a significant hurdle for achieving sustained economic growth. The decline in hotel occupancy is noted as a direct driver of employment levels, highlighting the vulnerability of the workforce to market fluctuations.

Tourism Metrics and Challenges to SDG 11: Sustainable Cities and Communities

A resilient and sustainable local economy is a cornerstone of SDG 11. The San Diego Tourism Authority’s recent forecast reveals a marked slowing of growth that threatens the economic vitality of the community.

Forecasted Tourism Metrics:

1. Overall Visitation: A total of 32.8 million visitors are expected by year-end, representing less than 1% growth and remaining below the 2018 peak of 35.8 million.
2. Hotel Occupancy: A 2 percentage-point decline is expected for the upcoming year, falling to 72%. This is the first significant drop since 2018, excluding the pandemic anomaly. A further decline to 71% is forecast for the subsequent year.
3. International Visitation: A critical component of the tourism economy, international travel has fallen sharply.
   • Visitors from Canada are projected to decrease from nearly 315,000 to just over 270,000.
   • Visitors from China have plummeted from 119,000 in 2019 to 54,370 this year.

This data illustrates a weakening of a key industry that pumps vital revenue into the local economy, affecting everything from small businesses to municipal services, thereby challenging the overall sustainability of the community.

Disproportionate Impacts and SDG 10: Reduced Inequalities

The economic downturn is not affecting all businesses equally, highlighting a growing concern related to SDG 10 (Reduced Inequalities). Small, independent operators are bearing a disproportionate burden of the slowdown.

Challenges for Small Businesses:

• Independent hotels, like the Ocean Park Inn, are struggling to break even due to falling room rates, revenue, and reservations.
• Unlike larger chains, small businesses cannot absorb the costs of deep discounting to attract customers.
• Rising operational costs for insurance, labor, and utilities are outpacing any modest revenue gains, further squeezing margins.
• Increased competition for a shrinking pool of leisure travelers puts small, specialized businesses at a significant disadvantage.

This trend indicates a widening gap between large corporations and small local enterprises, exacerbating economic inequalities within the sector.

Strategic Responses and SDG 17: Partnerships for the Goals

In response to these challenges, local tourism bodies are engaging in strategic partnerships and marketing efforts, aligning with the principles of SDG 17 (Partnerships for the Goals). These collaborations are essential for revitalizing the industry and ensuring its long-term sustainability.

Key Initiatives:

1. Partnership and Research: The San Diego Tourism Authority has partnered with the research firm Tourism Economics to produce a countywide forecast, enabling data-driven strategic planning.
2. International Outreach: Leadership from the Tourism Authority has engaged directly with airline executives, travel operators, and media in Canada to maintain San Diego’s profile as a premier destination.
3. New Marketing Campaign: A new $18 million marketing campaign, “Come to the bright side,” is being launched to reinvigorate regional interest. This represents a strategic pivot to present the city as optimistic, inclusive, and welcoming, thereby enhancing its competitive edge.

These collaborative efforts demonstrate a commitment to leveraging partnerships to navigate economic uncertainty and rebuild a more resilient tourism economy for the future.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 8: Decent Work and Economic Growth
   • The article’s central theme is the economic slowdown in San Diego’s tourism sector, a key driver of the local economy. It discusses declining business revenues, reduced tourist spending, and the threat to jobs, which directly relates to the goal of promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. The text highlights how the tourism trade employs “about 1 in 8 workers” and that disruptions to its financial performance have a significant “ripple effect” on the local economy and employment.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors.
   • The article focuses on the tourism and hospitality sector, which is a labor-intensive service sector. The content describes a state of economic stagnation and declining productivity rather than growth. Statements like, “San Diego has never experienced… an extended period of stagnation,” and descriptions of businesses struggling to “just break even” indicate a failure to achieve this target. The downturn is described as “pervasive in the marketplace,” affecting businesses of all sizes from Steve Pinard’s Action Sport Rentals to the Evans Hotels group.
2. Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men…
   • The article directly links the health of the tourism industry to employment levels. Robert Gleason, president of Evans Hotels, is quoted saying, “Occupancy is declining, and occupancy drives employment.” The article also quantifies the sector’s importance, stating it employs “about 209,000 leisure and hospitality workers.” The economic downturn and declining hotel occupancy rates pose a direct threat to achieving and maintaining full and productive employment for these workers.
3. Target 8.9: By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products.
   • The article details the response of the San Diego Tourism Authority to the economic slowdown, which involves devising and implementing new policies and marketing strategies to promote tourism. The launch of a new slogan, “Come to the bright side,” and a planned “$18 million on its media marketing campaign” are concrete examples of policies aimed at sustaining the local tourism industry, thereby protecting jobs and the local economy. The campaign’s goal is to reverse the “worrisome trends” and ensure the long-term viability of tourism in the region.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. For Target 8.2 (Economic Productivity):
   • The article provides several metrics that act as proxies for economic productivity in the tourism sector. These include:
     • Business Revenue Growth/Decline: Steve Pinard’s business is “down about 17, 18%” compared to the previous year.
     • Hotel Room Revenue: The article notes a decline after a period where “hotel stats like room revenue and daily rates were surging.”
     • Revenue Per Available Room (RevPAR): A key industry metric mentioned as being predicted to decline nationally.
2. For Target 8.5 (Employment):
   • While not providing an unemployment rate, the article implies its importance as a key indicator. The statement “occupancy drives employment” suggests that hotel occupancy rates are a leading indicator for employment trends in the hospitality sector. The article provides specific figures for this:
     • Hotel Occupancy Rate: Expected to decline by “2 percentage-point” to 72% and further to 71% the following year, down from a high of 78.5%. This decline is a direct measure of the pressure on employment.
3. For Target 8.9 (Sustainable Tourism):
   • The article uses several indicators to measure the volume and economic impact of tourism, which are essential for assessing the success of promotional policies. These include:
     • Overall Visitor Numbers: The article states that “a total of 32.8 million day and overnight visitors will have come to the county,” which is “still far off the peak visitation of 35.8 million in 2018.”
     • International Visitation Numbers: Specific data is given for key markets, showing a decline. Tourism from Canada is expected to “fall to a little more than 270,000” from nearly 315,000, and tourism from China has fallen from “119,000 visitors in 2019 to just 54,370 this year.”

Summary of Findings

Source: sandiegouniontribune.com