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San Diego’s beaches and top attractions haven’t gone anywhere but travel industry leaders have said for months that the city’s losing out on thousands of visitors because of weak marketing.
Their argument won over the City Council late last month. A majority agreed to release $6 million collected as part of a tax on hotel stays for promotional efforts mostly sidelined since January.
Not everyone’s convinced the dearth of television ads and other previously organized marketing strategies have really impacted San Diego tourism.
After all, visitors are still coming. In fact, there are even more of them than last year.
The city’s hotel occupancy rates were slightly up for the first 10 months of the year – 73.6 percent this year versus 73 percent last year, according to a national tourism industry group. San Diego remains one of California’s top four travel markets.
And yet many hoteliers, tourism experts and city leaders – including some who were initially leery – are now almost certain the forced pullback in promotions had a significant effect on San Diego tourism.
Jerry Morrison, an Encinitas-based tourism who regularly crunches visitor data, is one of them.
Months ago, I talked to Morrison about a Tourism Authority executive’s March claim that hotel occupancy was down due to a lack of marketing.
At the time, he wasn’t convinced. A trend hadn’t been established and San Diego hoteliers had only missed out on marketing cash for about three months. Morrison wanted to see more numbers.
Ten months later, he’s got them.
A recent report by Smith Travel Research, which produces regular reviews of tourism across the country, showed an average of a 6.5 percent year-over-year hike in revenue per available hotel room for the nation’s top 25 travel markets. That review measured January through October.
San Diego hasn’t performed quite as well. It’s up just 3.7 percent, less than California’s other top travel markets.
Hotel Room Revenue Growth in Top California Markets
Morrison said there’s not much else that could explain why San Diego isn’t seeing the same year-over-year increases as other markets.
“If it isn’t marketing, I don’t know what else it is,” he said.
But he was still a bit noncommittal, particularly when it comes to a recent statement from mayoral candidate Kevin Faulconer’s campaign.
Here’s that snippet, from a Faulconer press release:
“A lack of marketing has already resulted in the city of San Diego losing out on more than $3 million in tourism revenue when compared to tourism growth in the rest of the country – money that could have gone to street repair and other neighborhood services.”
Faulconer’s camp seems more certain of the impact of the reduced tourism marketing cash. I asked to see their math.
A spokesman provided me with a breakdown of city transient occupancy tax collections for the first eight months of the year.
According to those records, the city collected about $110.2 million in so-called hotel taxes during the first eight months of 2012 and about $114.6 million during the same period in 2013. That’s about a 3.9 percent increase.
The Faulconer campaign assumes San Diego would’ve brought seen a larger hike – the same 6.8 percent increase in tourism revenue that other top 25 travel markets saw through September – if hoteliers had been able to access hotel taxes held back due to the previous tourism marketing deal.
Morrison generally didn’t dispute the Faulconer team’s methodology, though he noted they used a September statistic but only looked at tax collections through August.
Still, he said it’s a responsible way to tabulate how San Diego might have performed and the result is about the same using the September numbers.
But as for Faulconer’s conclusion that the lack of marketing is responsible for money the city didn’t see?
“It’s probably true but I can’t prove it,” Morrison said. “And he can’t either.”
The chairman of the San Diego County Hotel-Motel Association and North County-based tourism marketing guru each took a more conservative view of how the decrease in marketing might have affected San Diego tourism earlier this year.
They’re now both sure the pullback in marketing had some impact, though neither was willing to say how much.
David Brudney, a Carlsbad-based marketing consultant who has counseled cities including Baltimore and Vancouver on tactics to draw tourists, noted that Faulconer’s math added up but said there are several other factors to be considered.
For example, Brudney said, perhaps other top 25 cities did a better job promoting their destinations before the tourism marketing fight ever materialized.
Jim Durbin, a Faulconer supporter and general manager of the San Diego Marriott Gaslamp Quarter, thinks the impact of the decreased marketing and staffing cuts at the Tourism Authority will be felt for some time.
Even the initial impact could be far more than Faulconer’s campaign projected, Durbin said.
The several months of reduced staffing created an opportunity for travel executives elsewhere to secure conventions and larger group visits for their cities, said Durbin, who chairs the hotel association.
And other cities may still have an opening.
“When you gut 40 percent of your sales force and have to let them go, it takes a while to ramp back up,” Durbin said.