California tourism surges, but strength of U.S. dollar threatens growth
Travel to California surged in 2014, toppling records across the state. But the increasing strength of the U.S. dollar is stoking concern that tourism growth might slow.
California hosted a record 251 million visitors last year, up 3% from the previous high of 243 million in 2013, according to Visit California, the state’s nonprofit tourism agency. Visitors spent $117.5 billion in the state and supported more than 1 million jobs, the agency said.
Economists attributed the jump in tourism to a strengthening economy, high consumer confidence and pent-up demand among Americans who put off travel during the recession. Also, a growing middle class in China is pushing visits from that country, experts said.
The state’s persistent drought, although weighing heavily on residents, doesn’t appear to bother travelers interested in sunshine, shopping and sightseeing.
“Visitors to Los Angeles are not going to care if it gets a little brown around the edges,” quipped Dean Runyan, a consultant who studied the tourism economy for Visit California’s report, released Tuesday.
Still, Runyan cautioned, the drought could affect tourism in rural counties where fishing and boating are popular pastimes.
Some experts worry that a bigger issue is the U.S. dollar’s strength compared to other currencies.
That could hurt California’s tourism industry because a strong dollar makes travel to Europe and other foreign destinations more affordable for Americans. At the same time, costs increase for international visitors who want to vacation in the U.S.
“The big threat in my mind isn’t the drought, it’s the dollar,” said Carl Winston, director of the school of hospitality and tourism management at San Diego State University.
To keep the tourism dollars flowing, Visit California and the Los Angeles Tourism & Convention Board have increased marketing efforts throughout the U.S. and abroad.
The state’s nonprofit tourism promotion agency has proposed a $116-million budget for next year, an 87% increase over the current budget.
The Los Angeles tourism board last year launched an outdoor billboard and digital advertising campaign in China, where the organization operates two offices.
“The strong tourism economy … contributes to the benefit of all Californians,” said Caroline Beteta, Visit California’s chief executive.
Tourism numbers might get a boost this summer, thanks to attractions scheduled to launch at local theme parks.
This month, Universal Studios Hollywood is opening a Springfield-themed area, based on “The Simpsons.” A high-tech, 3-D addition to its well-known Studio Tour, based on the “Fast and Furious” movie franchise, is expected to open this summer.
Universal Studios also is gearing up for the unveiling next year of the Wizarding World of Harry Potter attraction.
In Anaheim, Disneyland is sure to face throngs of visitors when it launches its 60th anniversary celebration, starting May 22. The event, which extends throughout the year, will include an upgraded parade, fireworks show and nighttime light and water extravaganza.
Last year brought new highs for visitors, spending and tourism-related employment to every California region, according to local statistics and the study released Tuesday by Visit California.
In 2014, Los Angeles set a visitor record for the fourth straight year. The visitor tally reached 44.2 million, up from the 43.4 million estimate announced in January and 4.8% above the 2013 visitor count, according to the Los Angeles Tourism & Convention Board.
L.A. visitors spent $19.6 billion last year, a 6.8% increase over the previous year, according to the board. International visitors, a coveted group of tourists who generally stay longer and spend more per visit, accounted for nearly 33% of all visitor spending, the board said.
Los Angeles International Airport was a major entry point for tourists, with a record 70.7 million passengers traveling through the airport in 2014, a 6% increase over 2013. The previous record of travelers through the airport was 67.3 million passengers in 2000.
Of the 2014 total travelers through LAX, nearly 27% flew on international flights — a 6% increase over the previous year.
The board said that tourism supports nearly 465,000 jobs in Los Angeles County.
A recent study concluded that most tourism jobs in Los Angeles County are low-paying and include waiters, hotel clerks, maids and theme park attendants. Still, city and state tourism leaders applauded the rising tourism numbers, saying the infusion of visitors’ dollars sparks growth in other business sectors.
Although the drought has yet to cut into overall tourist numbers, the effect could be felt in the future if the dry conditions continue, said Winston of San Diego State.
Visitors might think twice about traveling to California if the drought leads to brown golf courses and parched foliage at high-end resorts, he said.
Runyan, the Visit California consultant, agreed.
“If the drought continues,” Runyan said, “I would expect there would be some issues.”
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