Tom York on Business: Tourism Showing Signs of Life as California Recovers from COVID
Here’s a bit of good news to lead off this week’s column, a strong indicator that conditions are starting to get back to normal around here.
When it comes to dollars, tourism — one of the anchors of the regional economy — increased by $32 billion in 2021 after dropping in 2020 while the state was in the tightest grip of the COVID-19 crisis.
This according to a new study recently released by state tourist authorities in Sacramento. The report, prepared by consulting firm Dean Runyan Associates, details the economic impact of the direct spending of tourism in California in 2021.
Despite the resurging numbers, statewide tourist spending reached just two-thirds of the record-setting levels recorded in 2019, before the pandemic lockdown and subsequent waves of government restrictions hit tourism like a tsunami.
“After a devastating 2020, visitor spending is on the stairway to recovery, but we still have a long way to go,” said Caroline Beteta, top executive at Visit California, the state’s tourism marketing agency. “Cities continue to suffer without the critical international and group business segments.”
Indeed, urban destinations, such as the city of San Diego, which feature most of California’s hotels, restaurants and tourism attractions, have been particularly slow to recover, according to the report. San Francisco, for instance, recorded $6.1 billion in visitor spending in 2021 – just 43% of the $14.2 billion reached in 2019.
And here’s clear evidence of the shock to the California economy that was COVID-19. Spending by international visitors, which stood at nearly $28 billion in 2019, plummeted to $5.4 billion in 2021.
Visitor-generated tax revenue for state and local government increased by a third, to $9.8 billion, in 2021.
* * *
Belmont Park will stage a JobaPalooza, a park-wide job fair, on May 13. A spokeswoman said the mid-day event is going to be a full day of fun with a DJ, food for potential employees, swag bags with merchandise from tenants, and more.”
Belmont Park is also offering a summer bonus program — $150,000 of bonus incentives for employees who work 300 hours between June 1 to Sept. 5. For example, if 100 employees remain eligible at the end of the summer, each will receive $1,500.
* * *
San Diego Gymnastics, one of San Diego’s largest gymnastics schools, promoted two executives, Erin Adams and Paige Conroy, to the roles of co-CEO. The two take over from company co-founder Christina Grady.
The school, with four locations, is about to open a fifth in the county.
“The last few years have been a time of extraordinary challenges and growth. Erin and Paige were instrumental in allowing us to be nimble and flexible during tough times, all while growing the business and opening our La Costa location and relocating our Point Loma gym,” said Grady.
* * *
Amazon.com said it will create more than 700 new office jobs in San Diego, part of the 2,500 corporate and technical positions throughout Southern California. The news was first reported in a number of local news outlets.
The online retail behemoth says it has signed a lease with Seritage Growth Properties and Invesco for a 123,000-square-foot space at University Town Center. Employees will staff the space in early 2023.
About 1,000 workers are already working at Amazon’s San Diego Tech Hub on Campus Point Drive
“We’ve created more than 170,000 jobs across the state and are committed to continue investing here,” said Amazon executive Holly Sullivan, “These 2,500 new jobs includeroles building cloud infrastructure, improving the Alexa experience,and designing cutting-edge video games.”
Since 2010, Amazon claims it has created 170,000 jobs in California and invested $81 billion.
These investments have contributed an additional $80 billion to the California economy and support 259,000 indirect jobs — in addition to the employees the company directly employs.
* * *
San Diego AI startup FutureProof Technologies says it has raised $6.5 million in a funding round led by AXIS Digital Ventures with participation from prior investors Innovation Endeavors and MS&AD Ventures. The investment brings FutureProof’s total capital raised to $10 million.
According to the website, the company uses artificial intelligence to project insurance losses from hurricane, winds and floods.
FutureProof says its “climate-smart” insurance products to help close the coverage gap and motivate investment in climate adaptation.
For more information on the company, visit www.futureprooftech.io.
* * *
Blue Ocean Barns, which has a production facility here in San Diego, said recently that three dairy operations — Ben & Jerry’s, Straus Family Creamery and Clover Sonoma — have signed deals to roll out its natural seaweed supplement for cows that “dramatically cut the greenhouse gas footprint of farm operations.”
The product, Brominata, is seaweed-based digestive aid for cows. Blue Ocean grows the belch-busting seaweed in land tanks near the company’s dual headquarters in Kailua-Kona and here in San Diego.
The seaweed can reduce cow “methane emissions” from burps 80% and more without changing the taste of milk or meat, according to peer-reviewed publications.
The California agricultural authorities OK’d use of the product as a digestive aid for cattle earlier this spring.
* * *
Finally, this item–another way to look at San Diego’s every-growing housing crisis.
According to recent statistics, the average U.S. home now costs around $405,000. So how much space will $400,000 buy in an expensive market like San Diego?
Residential real estate platform Point2 recently did a study to find out how much space $400,000 would buy in the nation’s 100 largest cities and came up with some answers.
For that amount of cash, a homebuyer here can get between 500 to 600 square feet. That’s about the size of a ridiculously small studio apartment.
Compare that to places in California like Bakersfield and Fresno, where $400K will get you 1,860 square feet and 1,747, respectively.
San Francisco and Fremont provide the least for that amount of money–between 400 and 500 square feet.
Tom York is a Carlsbad-based independent journalist who specializes in writing about business and the economy. If you have news tips you’d like to share, send them to [email protected]