State’s Tourism Grows at Its Fastest Pace in Three Years

Travelers visiting California spent a record $55.2 billion in 1995, pumping money into the state economy at the fastest growth rate in three years, according to preliminary estimates released recently by the state.

Last year’s 4.2% increase in travel spending was robust compared with the anemic growth that has plagued the industry since 1990. Even adjusted for inflation, growth in travel spending in 1995 was 2.5%, far outpacing the sluggish 1% average annual growth in tourist spending from 1990 to 1994, when recession, civil unrest and a string of natural disasters combined to discourage travelers from visiting California.

“That is very encouraging growth,” said John Poimiroo, director of the California Division of Tourism, which commissioned the study released Friday. “We have managed to turn it around after the fires, floods, riots, earthquakes and all the rest.”

What’s more, California’s revived tourist trade added 17,000 jobs in 1995.

Tourism officials credit the rebound to a healthy economy, rising consumer confidence and pent-up demand to travel. Things were so good, in fact, that California last year managed to halt a six-year slide in market share that has seen vacation hot spots such as Las Vegas and Branson, Mo., siphon precious tourist dollars from the West Coast.

California’s share of all the money plunked down by domestic tourists nationwide increased to an estimated 10.7% last year, up from 10.4% in 1994, according to state projections. California remains the most visited state in America. More than 295 million foreign and domestic tourists are estimated to have visited the Golden State last year.

So far, 1996 is shaping up to be a banner year as well. Hotel occupancy in Los Angeles and Orange counties is up over last year. The economy is chugging along comfortably, and area amusement parks are bracing for record summer crowds thanks to new blockbuster attractions such as Jurassic Park at Universal Studios Hollywood and Superman the Escape at Six Flags Magic Mountain in Valencia.

But industry watchers warned Wednesday that the industry shouldn’t get complacent after one year of peppy growth. Stratospheric gasoline prices, Mother Nature or an economic hiccup could always spoil the party. Tourists have lots of other alternatives. And industry leaders are still searching for a way to bolster the state’s paltry tourism marketing budget, which at $7.5 million ranks California 48th in per-capita spending on promotion.

“We can never rest on our laurels in this business,” said Jack Lindquist, former president of Disneyland and an officer with the new Orange County Tourism Council. “We can never take for granted that a trend is going to continue. We have to get out there and market our product.”

The $55.2 billion that tourists deposited in California cash registers last year is almost double what visitors spent here just 10 years ago. Even adjusted for inflation, that represents a 38% boost in spending.

All that tourist money has translated into jobs for Californians. Travel expenditures provided employment for an estimated 658,000 state residents who earned a combined $11.8 billion in 1995.

Although tourism employment fell during the recession of the early ‘90s, the sector has rebounded strongly and continues to outperform others when it comes to job creation, according to Tiffany Urness, research manager for the state Division of Tourism.

In 1994 for example, aerospace jobs plunged by 16.4%, the computer and electronics sector trimmed jobs by 2.8% and agriculture employment dipped 2.4%. In contrast, tourism employment increased a healthy 4.6%.

“Tourism employment compares very favorably with that of other industries,” Urness said. “It confirms the growth we’ve been seeing in the service sector and reflects the overall health of the economy.”

State and local tax collectors reaped the fruits of a rebounding tourist industry as well. Travel spending generated an estimated $1 billion in local taxes in 1995, most of that coming from hotel bed taxes and travel-related local sales taxes. That’s a jump of $70 million, or 7.4%, over 1994.

Visitors pumped an extra 7.8%, or $150 million, into state coffers last year, bringing the state’s total tax haul from tourism spending to $2.1 billion in 1995. Most of that came from travel-generated state sales taxes, followed by fuel and personal and corporate income taxes on travel-related businesses.

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Visiting California

Travel spending in California has grown 17% from five years ago. Last year’s visitor spending provided jobs for more than half a million people and added $3.1 billion to state and local tax coffers. Total spending, in billions of dollars:

1995*: $55.2

Note: Includes accommodations, food, transportation, recreation, air fare, travel agent fees and retail purchases

* Preliminary figure

Source: California Trade and Commerce Agency

Researched by JANICE L. JONES / Los Angeles Times

Travel Teeming

Preliminary data shows travel spending in California reached $55.2 billion last year, a 17% increase from five years ago. Last year’s visitor spending provided jobs for more than half amillion people and added $3.1 billion to state and local tax coffers.

Travel Spending*

(in billions)

1995: $55.2

* Includes accommodations, food, transportation, recreation, air fare, travel agent fees and retail purchases

Travel-Related Employment**

(in thousands)

1995: 658

** Includes full- and part-time positions

Travel-Related Payroll

(in millions)

1995: $11,770

Tax Revenue Generated

(in millions)

1995: $3,080

Source: California Trade and Commerce Agency; Researched by JANICE L. JONES / Los Angeles Times