Tourism industry in San Mateo County still strained

Hutar presented the board with a COVID-19 impact update, detailing how the pandemic has devastated business and leisure travel profits. Before COVID, the tourism sector brought in roughly $502 million in tax revenue annually and provided more than 45,000 jobs.

A year into grappling with the pandemic, the sector has lost 25,000 jobs. Calling the figure startling, Hutar noted the displaced employees, many with family members depending on them, have also lost their benefits.

The hotel sector alone has seen a 76% decline resulting in the loss of about $365 million in transient occupancy tax. Each area of the county has experienced a similar “double whammy” — 50% drops in occupancy and daily rates, said Hutar.

Recognizing the trend would likely continue without some intervention, he called on supervisors to share support for adding business meetings within the state’s color-coded reopening system.

“Our fear is we are heading in that direction and could possibly meet that trough and we certainly hope we don't exceed it,” said Hutar. “Unless some actions are taken, this situation is quite dire.”

Nearly 140 agencies from all over the state have come together to request that business meetings between 25 and 250 people be treated similarly to how the state treats movie theaters. In the current tier structure, the county is in the orange tier permitting movie theaters to open at 50% capacity of 200 people, whichever is fewer.

California is the only state to not permit some form of in-person business gatherings or to include meetings within its recovery plan, said Hutar. Lacking a clear plan for when meetings can begin again, Hutar said clients interested in hosting meetings in the county are canceling rebooked events to host them in other further opened states.

“Without the start of meetings, we are very concerned about the projections going forward,” said Hutar, suggesting a tourism sector recovery could be pushed out beyond initial anticipations of 2024.

Echoing Hutar, County Manager Mike Callagy said the state has not presented a plan forward for the industry, adding that county lobbyists have been directed to engage with state representatives on the matter.

Venues are prepared to host events though. Large brand-name venues have also partnered with large cleaning product companies to develop safe meeting protocol. Smaller hotels and venues also have access to training material prepared by the California Hotel and Lodging Association.

The environment is also different than it was in June of 2020, he said, adding that the public better understands safety guidelines now and the state is making progress with its vaccine rollout.

People are also more eager to gather, said Hutar, though corporate and international travel is less likely to recover in the near future. He anticipates leisure travel is one area that will begin to grow again as Californians grow interested in getting out for short distance vacations.

“There’s strong pent-up demand. Folks have been in their homes and they want to get out,” said Hutar.

Responding to a recommendation by Supervisor Warren Slocum, the board decided to create an informal subcommittee of supervisors Dave Pine and Don Horsley to host conversations with state leadership about reconvening business meetings.

Pine noted his district is home to the San Francisco International Airport and the most hotels than any other district. Horsley’s district spans much of the county’s coastside, a heavily visited region.

Slocum also suggested the county look into job training opportunities for employees in the tourism sector who have lost their jobs.

“I personally, as I’m sure the rest of us, don’t understand why California doesn't have a plan,” said Slocum. “But frankly that’s unacceptable.”

sierra@smdailyjournal.com

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