It’s hard to overstate the powerful influence that tourism exerts over the region’s economy.
In San Luis Obispo County, there really isn’t much else, outside of government, universities and agriculture. In Santa Barbara County, the post-“Sideways” wine tourism boom has added a new dimension to what was already a national and global brand as well as Southern California’s favorite getaway spot.
Although tourism is less influential in Ventura County, wine tours, outlet shopping, the Dallas Cowboys training camp, a major air show and, of course, the Ventura County Fair have a big impact when taken in aggregate.
That’s why we’re pleased to report that for the first time in several years, the tourism industry seems to be on an upswing. Reports from hotels as well as the Mid-State Fair, Old Spanish Days, the Ventura County Fair and others suggest that the travel industry has found its way toward a “new normal.” Some further thoughts:
• The hotel industry is filling rooms, but the high end of the luxury rental market won’t be the same — for years, if not decades. That means a price leader such as Fess Parker’s DoubleTree Resort in Santa Barbara can pretty much count on Four Seasons The Biltmore or even Bacara Resort and Spa moving prices pretty much in lock step.
• International tourism is holding up. Russians are shopping at Saks Fifth Avenue, Spaniards are grabbing Starbucks on State Street or tasting wine in Paso Robles and the global appeal of the region is on the rise, despite California’s well-publicized problems.
• The wine glut is ending but pricing is still iffy. Just as the new normal for hotels is competitive pricing, so the wine industry still is having trouble moving its higher-priced vintages. This price compression is likely to continue, particularly in the market for wines above $25 per bottle.
• People will splurge — but selectively. With baby boomers aging, higher-end restaurants can count on a certain number of 60th birthday parties and 40th wedding anniversaries. But they’re also going to have to build their businesses on bargain menus for those non-party nights.
What often goes unrecognized in economic analysis is the pull that tourism has in attracting future business owners and second-home buyers who love our climate, our people, our beaches and the region’s overall appeal. What also goes unrecognized is how much a downturn in tourism can have ripple effects — with four or five major hotel construction projects on hold up and down the region, the ripples are felt on employment, services and even housing.