If it is not too soon to talk about something other than the fires, I will take this opportunity to use the events of the past week to help illustrate an essential and valuable resource for the San Diego community. Visitor based businesses played a prominent role in the evacuation and relief of residents fleeing the fires by housing evacuees in local visitor accommodations, from campgrounds to luxury hotels, and even Qualcomm Stadium and the Del Mar fairgrounds served as major evacuation points for thousands of people. San Diego’s visitor industry is a tremendous asset for the region that often does not receive the acclaim it deserves, often overlooked on the one hand and taken for granted on the other.

Historically, San Diego relied upon military/defense, manufacturing, and visitor industries to drive economic growth. In modern times, high-tech research, development, and services (including biotech) arose to be a fourth pillar of regional economic prosperity providing a sturdy and diverse base of stability for the region. This diversity is a primary reason for San Diego being one of the state and nation’s strongest regional economies in recent tumultuous years.

Most economic development efforts focus on high-tech industries, yet San Diego’s visitor industry generates a comparable dollar amount of production for the region. San Diego’s biotech industry, for example, generates considerable public attention, yet biotech jobs number only about 30,000 locally, while the visitor industry directly accounts for 70,000.

Thirty-two million visitors spent $7.7 billion in the regional economy last year, with one in every nine civilian jobs due to the industry. Visitor spending represent $2,502 for every San Diego resident.

A criticism often leveled at the industry is that it creates mostly low paying service jobs providing little opportunity for growth and advancement. Critics often argue the industry disproportionately contributes less to San Diego’s economic prosperity and the investments and support for the industry should be curtailed.

This criticism misses on four important levels.

First, the visitor industry has a far higher economic impact than many industries because it brings “new” or additional spending to the local economy. Many industries and the jobs created mostly re-circulate already existing dollars within the local economy. Visitor spending increases the dollar value of the total San Diego economy.

Second, information about wages paid for visitor-based jobs and their economic impact is blurred by local residents spending money on dining out or going to entertainment venues. So called “low-wage, hamburger-flipping jobs” depend upon local resident spending as much, if not more, than visitor spending. We know this because San Diego households spend nearly one-half of their food budget eating out.

Third, calculating wages for some visitor-based jobs is not necessarily comparable. Data sources usually do not include tips and gratuities, which can make up a substantial portion of a job’s total compensation, especially in food services and entertainment. In addition, comparing “annual” wages does not recognize the often part-time and seasonal aspect of many food service and entertainment workers. It is misleading to compare compensation with other fields of full-time, year round work.

Fourth, one of the most valuable aspects of the visitor industry is the opportunities provided the local labor force. The visitor industry is one of few offering career advancement from entry-level to top executive. Visitor-based employment also often provides new job entrants the first rung of job experience, giving young people their first business experience, providing basic workplace skills of managing money, taking direction from superiors, working as a team, and satisfying customers. The visitor industry is one of the few industries providing a bridge from low to high-paying jobs, an important consideration for developing a well-diversified labor market.

The visitor industry provides a significant stabilizing influence on San Diego’s overall economic makeup and should not only be recognized for it’s importance, but be fully supported and sustained financially from the tax revenues it generates for the region. One of the largest sources of revenue for the city of San Diego, and fastest growing, is the tax revenues derived from visitors staying in area hotels. Despite the considerable amount generated by these taxes, the city cut visitor promotion funding (the very use for which the tax was designed), including the budgets of local Convention and Visitors Bureaus. In other words, they are cutting one of the best resources to increase revenues — a very short-sighted strategy.


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