As Santa Monica enters the height of the summer season, the city’s tourist industry has yet to recover from its pandemic slump.
That’s not to say the industry is in decline. Visitor numbers are increasing and there are signs the area continues to be attractive to tourists.
A recent survey by cheaphotels.org ranked Santa Monica as the second most expensive summer destination for hotels and while local officials said the details of the survey should be taken with some skepticism due to questions over the methodology, the broad implication, that Santa Monica remains a popular visitor destination was true.
The survey is based on 30 cities in California with at least 20 hotels or inns. For each destination, the average price for the cheapest available double room was established for the period spanning July 1 to August 31, 2023. Only hotels rated at least three stars and located close to the beach or city centers were considered for the survey. Rates were established in late June based on prices shown on leading hotel booking sites.
“My first response would be, California is in the number one spot as an international destination in the United States. They’re number one. And then Los Angeles LAX is the top point of entry for most travelers into California. They are above both San Diego in San Francisco,” said Misti Kerns, CEO, Santa Monica Tourism and Travel. “So when you look at that, I mean certainly Santa Monica sitting in the county of Los Angeles, as the premier beach area, there’s no surprise that we’re ranking as a more popular destination from a price structure.”
Kerns said local tourism, and the spending it brings, has not recovered from the pandemic slump but continues a steady rebound.
The total number of visitors to Santa Monica reached 5,320,500 last year and while that’s far short of the 8,413,100 that came in 2019, it is a 51% increase from 2021. Total spending by tourists is up 28% year on year but at $961,711,800 its about half of the $1.89 billion recorded in 2019. Hotel tax revenue paid to the city actually surpassed 2019 levels last year reaching $59,232,000 but retail tax into the city was only about a third of what it was pre-pandemic.
International travelers are traditionally worth more to city coffers and create less strain on city services but only 21% of visitors are currently foreign compared to about 50% a few years ago. Kerns said she expected it would take another year for the travel industry to adjust to a normal cycle after zero activity during lockdown and then pent up demand exploding last year.
“So we still have some catching up to do, but it’s happening quicker than everybody forecasted,” she said. “So my point was one year from now, in 12 months, when we have this conversation I think it will be in full recovery.”
In the short term, she said visitors will likely follow the pattern established in recent weeks with a high number of Los Angeles area residents visiting on weekends but subdued numbers during weekdays. However, a heat wave would drive many more people to the beach.
“If we start hitting that, 90 degree weather in Downtown, in the valley and higher, then we’re going to continue to see an increase in our daytime population. I mean, there’s no way around that,” she said. “Converting those people to an overnight stay is where we hope we can capture more of that, where they’re not having to drive in here and drive around all the time.”
Part of the local recovery has been driven by large sporting events in the area including the Superbowl, MLB All Star game, Wrestlemania and US Open. With the World Cup and Olympics on the horizon, she said those visitors could be invaluable to the local industry given Santa Monica’s proximity to both the airport and SoFi stadium.
“One of the things that people confuse about the audience is sports people that like to go watch are also business people,” she said. “So they may do business while they’re here and then go into what we call “bleisure” which is business and leisure. You know, they might have their family come in after their two days of business, stay for the weekend for whatever game or sporting event or concert activity is happening, and we’re seeing some of that come in as well.”
While Kerns is optimistic about the future, fears around homelessness, crime and the ongoing labor dispute targeting hotels could all stunt that recovery.
As a Santa Monica resident, she said she knows why residents are concerned but the local experiences don’t always become problems for tourists.
“The things that you’re talking about that may affect us locally, don’t necessarily translate to those that are coming in from out of town unless they have a direct negative experience,” she said. “And I think that while we are challenged right now, the opportunity of people having a good experience here far outweigh that.”
That said, it is still important for local officials to work on those issues both to address quality of life concerns from residents and as a means of funding city services. Locals would have to pay about $1,300 per person to replace the value of tourism when funding city services that locals rely on.
“I think it’s important to remind ourselves that things are moving forward, and they’re moving forward in a positive way,” she said. “And yes, we have some challenges, but we’re only going to get through it by open discussion and collaboration and people being willing to sit down and have those tough conversations.”