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Tourism’s Comeback Boosts Downtown Economy

By Olin Ericksen and Jorge Casuso

July 2 -- On an early Thursday afternoon Felipe Mendez's cab sits at the end of a long line of taxis near Second Street and Santa Monica Boulevard.

Some drivers leave their engines purring in anticipation of shoppers toting bags from the Third Street Promenade or visitors streaming from nearby hotels. The next fare could come at any minute.

"Business is good now," says Mendez, a father of two who hails from Mexico City. "I'm getting a lot more people taking a cab."

Tourists, Mendez estimates, now make up 90 percent of his fares, with more than half of them from outside the U. S. "I get everyone, a lot from Spain, Japan… Chinese and Russian," Mendez says.

Nearly five years after terrorist attacks on the East Coast sent Santa Monica's tourism industry into a tailspin, visitors from across the country and around the world seem to be flocking back to the beachfront city, tourism officials say.

Local hotels are bracing for a hot summer, as the Travel Industry Association of America is predicting a 6.5 percent increase in international visitors who are expected to boost their spending by 9.6 percent, thanks in large part to a weak dollar. (see related story on page 2)

"The economies in a lot of the nations that are typically the tourist base for Santa Monica are strong now," says Robert O. York, a consultant to the Bayside District. "The currency is still generally favorable.... In the last several months it's been a relative bargain to come shop in the U.S."

And many of the tourists are heading Downtown, where they have helped boost sales to pre 9/11 levels, according to York.

"Based on the discussions I've had with people, everybody is back in pretty good numbers," York says. "The tourists are definitely back, and they're definitely spending."

While the latest tourism figures are still being crunched, research shows that 78 percent of hotel visitors walk once they arrive, and Downtown is the most likely destination for them, says Misti Kerns, executive director of the Santa Monica Convention and Visitors Bureau.

"It's important that we market the Downtown district as part of our overall strategy, because its location provides the majority of overnight visitors everything they need – shopping, dining, theaters, the beach," Kerns says.

"Given that our marketing efforts focus primarily on out-of-town and international visitors, those hotel guests – and the areas where they are most likely to spend their money – are major opportunities," she adds.

For Luis Briseno, a manager for the international women's retailer, Bebe, those tourists mean increased sales during his store's peak months. While there are only a handful of customers in his store on this weekday morning, that will all change come the weekend, thanks to shoppers from outside California, Briseno says.

"Friday through Sunday, I'd say 90 percent of the traffic are out-of- towners," says Briseno. "This is the season when sales really pick up. It's not really at its peek yet, but it soon will be and much of that is due to tourists."

Midwesterners make up a good part of Bebe's out-of-town clientele, though others who stroll in to enhance their fashion statements arrived on a jet from Europe, Japan or Mexico, he says.

That, Bayside officials say, is what sets Santa Monica's Downtown, and especially the Promenade, apart from other regional shopping destinations.

"We have the hotels here," says Bayside District Board member John Warfel, "and Santa Monica has a long tradition of being a tourist attraction. We've got the beach, the pier and the Promenade, which has become a destination."

And the Promenade's reputation as a destination is spilling to neighboring streets.

Late one weekday morning on Fourth Street, the staff at Border Grill is busy prepping for the lunchtime crowd. The sound of silverware and glass clinking is music to the ears of the restaurant's general manager, Brian Strausberg. While sales aren't quite back to pre-9/11 levels, they're getting close, he says.

"Business is coming back, but we haven't quite hit the peak months of summer, between June and July, so we'll have to wait and see," says Strausberg. "We're getting close to where we were though."

Like some of the major Downtown retailers, Border Grill relies heavily on foot traffic from out-of-towners for its business, Strausberg says. So much so, the eatery has begun targeting them in advertising.

"We have a coupon in a travel magazine that we are seeing being used pretty often," he says. "If you offer $20 off a meal, people are going to use it."

Like Bebe, Border Grill gets many customers from the middle of the country, as well as those with foreign accents. "We probably get a lot from the Midwest," he says. "We can also get a lot from Germany and Japan."

Down the block, at La Serenata de Garibaldi, hostess Daigny Maister is also greeting many tourists. Nearly 30 percent of the Mexican restaurant's hungry clientele comes from outside the U.S., many of them from down under.

"Apparently we're featured in a guide book in Australia, so we tend to get a lot of Aussies in here as of late," Maister says. "As we head into summer, we're getting a lot more people coming in," a good number of them from Asia and England, she adds.

Next door at $10 The Basement Store, Sharett Thompson stands at the cash register, waiting for a shopper to make a final decision on the clothes she's been eyeing. Though open for only seven months at the former site of a tattoo parlor, tourists are definitely making a mark on the store's bottom line.

"I'd say more than half, maybe 65 percent, are tourists from outside California, though locals come in during the week," Thompson says. "They are a lot of our business."

While it is too early to tell if the weak dollar will continue to boost tourism, Santa Monica's, as well as the LA area's, reputation as a major destination will likely continue to lure visitors from abroad, experts predict.

"It's an international destination," says York, who is a partner in the Fransen Company. "This has always been a destination, and there has been a pent-up urge to travel. A lot of it is just global economics and a global sense of security."

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