Record Tourism Pumps Up Local Economy

By Jorge Casuso

June 29 -- Visitors are coming to Santa Monica in record numbers and spending record amounts of money, according to a report released by the Convention and Visitors Bureau Tuesday.

Some 4.7 million domestic and international travelers visited the city in 2004, shattering the previous peak of 3.8 million visitors in 2000, according to the 2004 Economic Impact report.

Those visitors spent a total of $840.6 million (or an average of $110.50 a day), far ahead of the previous record of $787.93 spent by visitors in 2000, the report found.

On average, hotel guests pumped the most money into the local economy, spending $198.20 a day, compared to the $73.47 spent by the average day visitor, according to the report conducted by Lauren Schlau Consulting and CIC Research Inc.

In fact, hotel guests accounted for nearly half of all the money spent by visitors, although they only comprised 11 percent of the total number of travelers to the city, the report found.

"This crucial research shows the importance of domestic and international overnight hotel guests," said Misti Kerns, the bureau's president and CEO. "Overnight hotel visitors affect the city in many positive ways."

The Transient Occupancy Tax (TOT), or city's bed tax -- which the City Council raised to 14 percent last year -- pumped a record breaking $23.8 million into the City's coffers in fiscal year 2004-05, up $11 million since 2000, according to the report.

The total is expected to jump to $27 million in 2005, thanks in large part to the 2 percent hike in the tax approved by the council, according to the report.

The bed tax will help bankroll the $6 million a year in funding the City will give to the School District under an agreement hammered out last year.

"If each of the 40,000 Santa Monica households were asked to pay taxes to compensate for the approximate difference in TOT without the 2 percent TOT increase in 2005, the cost is estimated to be an additional $647 per household," according to a statement released by the bureau.

In addition to the bed tax, Santa Monica's tourism industry supported 9,380 jobs in 2004, according to the report.

"We anticipate that both industry supported employment and TOT will continue to climb in 2005, resulting in a solid base of employment and revenues," Kerns said.

The number of domestic and international visitors and the amount they spend has been steadily increasing since the September 2001 terrorist attacks on the East Coast sent the city's vibrant tourism industry into a tailspin, the report found.

While the biggest spenders stay overnight, day visitors still accounted for the 85 percent of the total visitors in 2004, a rate that remained steady since the previous year, according to the report.

"Although the majority of marketing efforts by the Santa Monica CVB target international and overnight visitors, we recognize the importance of day visitors to Santa Monica as well," said Debbie, Lee-Nguyen, the bureau's vice president of business development.

The bureau provides day visitors with maps and visitor guides at three locations and serves as a "resource for residents and their visiting friends and relatives," Lee said.

Friends and relatives staying in residents' homes accounted for 4 percent of the visitors and 16 percent of the spending, according to the report.

A breakdown of total spending shows that visitors spend 29 percent on shopping, 23 percent on meals and 22 percent on lodgings, according to the report.

Historic market research shows that 78 percent of hotel visitors walk once they arrive in Santa Monica, CVB officials said.