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Tourism: A Critical Factor In Santa Monica’s Economy:

How important tourism is to Santa Monica’s economy was the subject of a recent Planning Commission meeting.

Santa Monica’s Convention and Visitor’s Bureau (CVB) gave a presentation on the relationship of the tourism industry to the City at the March 7 meeting as part of the City’s ongoing update of its Land Use and Circulation Elements of the General Plan.

Tim Kettleson, Chair of the CVB Board of Directors, noted, “Today, visitor-serving amenities and businesses are integrated into the City’s fabric – throughout the City, though concentrated near the ocean – and enjoyed by visitors and residents alike.”

An economic impact/visitor profile study that was last done in 2004 estimated the tourism volume for that year was 4.9 million and the visitors spent $840.5 million.  The biggest areas of tourist spending were shopping/gifts, dining and lodging. This spending translated into an estimated $30 million contribution to the City’s general fund: $25 million in Transient Occupancy Tax and $5 million in retail sales tax.  Tourism activity in 2004 supported 9,300 local jobs.

Also in 2004, the average Santa Monica visitor stayed about two nights, while 51 percent were U.S. residents and 49 percent were international visitors.  “Hotel guests accounted for 11 percent of the visitor volume but 49 percent of the total visitor spending.” A breakdown of Santa Monica visitors in the same year found 72 percent visited for leisure/pleasure, 10 percent visited friends/family, six percent came for business and two percent came for meetings.  These visitors arrived mainly by personal or rental vehicle, but once in Santa Monica 66 percent walked and 15 percent used some type of bus/shuttle.

Venues sought out by tourists include the Third Street Promenade (88 percent), the Pier/Palisades Park (83 percent), the beach (55 percent) and Main Street (30 percent).  The City’s Opportunities and Challenges report, which is part of the General Plan update process, found that overnight and day visitors constitute 8.5 percent of the City’s daytime population.

During questioning from the Commissioners, CVB President and CEO Misti Kearns stressed that the average fee for City hotels is $280/night; Beverly Hills is the only city in the region with higher rates.

Several Commissioners were concerned about how high the hotel rates are and that the City’s hotels are concentrated by the beach.  Commissioner Hank Koning’s suggestion was “to encourage hotel development which should be convenient to business, convenient to an Exposition Line station and therefore convenient to the beach, and wouldn’t be as expensive as a beachside hotel.”                        

The CVB “promotes Santa Monica as a conference, business and leisure travel destination to non-local visitors with a focus on attracting U.S. and international visitors who stay overnight in Santa Monica hotels.”

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