Tourism on upswing in San Mateo County

SFO uses data from security checkpoints to measure how many people go through the airport a day. Passenger activity recovered to 75% of pre-pandemic levels in June. Domestic travel was at 77% while international travel was at 71%, according to Yakel.

Airline traffic reports on the SFO website also showed increased passenger activity. More than 4 million passengers came through SFO in June, nearly 2 million more than the previous year, approximately an 82% increase.

This included about 3 million domestic travelers and 1 million international travelers, respectively a 54% and 286% increase from June 2021.

Yakel expected SFO to regain most of its passenger activity by next year as long as the international recovery continued. Flights to Asia were of particular concern, which was at 50% of pre-pandemic levels.

China, a major market for SFO, lagged behind all other foreign destinations with limited flights to Hong Kong and no nonstop flights to mainland China because of COVID-19 testing and quarantine policies. This also made it difficult for airlines to schedule connecting flights, Yakel said.

The European market, meanwhile, experienced a remarkable turnaround with the easing of COVID-19 protocol just before the summer travel season started. Yakel also attributed the European rebound to management strategies that positioned SFO as the airport of choice for airlines looking to expand their services.

A high-level delegation that included San Francisco Mayor London Breed and Airport Director Ivar Satero traveled to Europe to promote SFO as a premiere tourist destination that was “the international gateway to California and a hub for European markets,” as stated in the mayor’s press release in March.

The strategy proved successful. “One of the big wins this summer was London, and London is actually higher than its pre-pandemic level,” Yakel said.

Yakel described the same positive trend for destinations like Germany, Spain, Denmark and Turkey. Other regions and countries that experienced higher passenger activity than seen in 2019 included the Middle East, India, Japan, Australia and New Zealand while Canada and Mexico also showed strong recoveries.

Constraints in staffing, however, limited airline growth, as carriers experienced a shortage of pilots. An unprecedented number of pilots retired during the pandemic and training programs did not keep up with demand.

Because of this, Yakel predicted moderate growth for the next year.

“We may see that 75% of pre-pandemic level creep up a little bit. We may reach 80% by the end of this year,” he said. “But we probably won’t do any better than that. And we certainly won’t reach 100%.

“And that is specifically because of some of those staffing considerations,” Yakel added.

John Hutar, CEO and president of the San Francisco Peninsula, the county’s tourism bureau, made similar projections for the hotel and convention industry in San Mateo County. He anticipated a full economic recovery by 2024 or 2025.

Hutar referenced COVID-19 variants, airline staffing shortages, closed corporate campuses, the war in Ukraine and recession fears as “headwinds” affecting tourism in a recent presentation to the San Mateo County Economic Development Association.

“For every step, every two steps, every three steps we take forward, there’s one or two in reverse,” he said in an interview.

But Hutar was optimistic that tourism was rebounding. Hotel occupancy rate was 76% in June, the highest since the onset of the pandemic, and the average daily rate for rooms was $199.09, again the highest since the pandemic. For comparative purposes, the occupancy rate was 81% and the ADR rate was $205.58 in 2019.

To mitigate its losses, the tourism industry pivoted to leisure travel during the pandemic even though it traditionally relied on the business sector. But in another encouraging sign, business travel has started to come back to San Mateo County, as evidenced by more convention inquiries and bookings.

Still, with the unpredictable swings of the pandemic, Hutar was not taking these bookings for granted. “The joke is if you speak to a hotel operator, the phrase is today was great or today was fine,” he said. “But I don’t know about tomorrow.”