Despite the recession that began in 2008, a steady flow of domestic and international tourists has helped stabilize California and Santa Barbara County in particular, economists said Thursday during the 2015 North Santa Barbara County Midyear Economic Update.
From July 2013 to June 2014, tourists spent about $109 billion in California, according to research conducted by Visit California, a state tourism association. Although just 6 percent of visitors were international tourists, they often spend the most money, said Dan Mishell, director of research for Visit California.
“The farther out you go from your destination, the more people spend,” Mishell told the gathering at the Alisal Guest Ranch in Solvang, adding that Chinese tourists are dominating the state’s tourism market, second only to Canadian and Mexican visitors.
International tourism in the U.S. is projected to increase at least 4 percent by 2017, with California seeing an increase of about 3 percent, Mishell said.
Most of that travel is driven by visitors' desires to try new food. About 80 percent of U.S. travelers are interested in trying local cuisine, with 30 percent traveling for the sole purpose of eating.
"They take the trip because they want a culinary experience," Mishell said.
A forecast for increased tourist spending, however, is not always accurate, cautioned UC Santa Barbara Economics Professor Peter Rupert, who also is director of the UCSB Economic Forecast Project.
“Overall, the U.S. is doing well … the rest of the world is not,” Rupert said. As a result, international tourists wary of a higher exchange rate because of a strong U.S. dollar could choose to vacation elsewhere.
For now, however, the renewed interest in state tourism is one of the driving factors behind California reclaiming its title as the world’s eighth largest economy in 2013, according to Visit California.
It shows. Almost 1 million jobs in California are tourism-related, Mishell said, and hospitality and service jobs increased in north Santa Barbara County by 12 percent. The average daily room rate in the Central Coast has increased 4 percent since last year.
“The only city declining in leisure and hospitality employment is Lompoc. Other areas like the Santa Ynez Valley are growing quite starkly and employment growth has been robust,” Rupert said.
Overall, Solvang has seen one of the largest drops in unemployment, data shows.
In the North Santa Barbara County housing market, economists say that prices have been rising steadily. The median home price is about $578,000, but prices have not reached the peak levels seen before the recession hit in 2008. San Francisco is the only city in the state to see an increase in housing costs since that peak, Rupert said.
Bottom tier home values in north Santa Barbara County averaged about $430,000, while top tier homes, mostly in South County, averaged about $1 million.
“The bottom tier fell like crazy, stayed flat for 2012 and 2013, and are about 40 percent from their maximum value, so those prices are still very low,” Rupert said.
Homes in Lompoc are appraised as some of the lowest values in the county, Rupert said.