As tourists once again fill Santa Monica streets and residents continue to venture out to dine, the City is reporting continued economic growth and recovery following the pandemic. The most recent quarterly sales tax revenue report, from April through June of this year, shows an increase of 6.4% over the same quarter of the previous year.
According to the report, hotel occupancy levels soared, marking a 97% increase from Spring 2021. Restaurant sales were also up, accounting for 21% of the City’s quarterly revenue, compared to 14% in the same period the year before.
“Our restaurants and hotels were obviously one of our hardest hit business sectors due to COVID, so it’s good to see that they’re continuing to thrive and bounce back,” Economic Development Manager Jennifer Taylor said in an interview with the Daily Press.
Car sales, particularly luxury car sales, were also up and many of the City’s car dealers remain among the top 25 producers of revenue for the City. Electric and hybrid vehicles have been especially popular in recent years and Taylor said this is a trend she expected to see continue.
“Especially as gas prices are increasing, I think a lot more people are looking for — and they have been for a while — electric and hybrid and more sustainable transit options,” she said.
She added that this bodes well for Santa Monica, which has a Tesla dealership and repair shop as well as charging stations and other infrastructure the City has invested in to promote and support the use of electric vehicles.
One of the few sectors that didn’t experience growth in the last quarter was general consumer goods. The popularity of online shopping, which surged during the pandemic, has yet to dissipate and retail has remained below pre-COVID levels with fewer shoppers opting to visit brick-and-mortar stores.
Taylor said this is a “double whammy” for the City because not only are they not seeing growth in the sector, but online sales means that the tax revenue goes into a “pool” that is split throughout the County with only a portion going to Santa Monica.
“All the online sales, so that’s the Amazons and the Wayfairs and UberEATS, are now going in the pools, too,” she said. “So, we find that our consumer goods are not quite as strong as they were, because I think a lot more people are still shopping online.”
To remedy this, Taylor said she encourages residents and visitors to shop locally and in person whenever possible.
“We encourage people to buy local and also pick up the items that people are ordering online if it has a location in Santa Monica,” she said. “That helps to maximize the revenue that the city [and] our school district receives. Otherwise, they miss out on it because then we have to share it with the whole county.”
Taylor said she expected to see continued growth in the next quarterly report, which covers the summer months and was likely to be out early next year.
“From all accounts that we’ve heard from our hotels and our restaurants, they generally all had a really good summer,” she said. “So, I’m hoping that we’re going to see these continued trends of positive economic recovery…and we’re hoping consumer goods are going to start to increase, too.”