Napa Valley is recovering from pandemic in ‘sustainable’ way

Napa Valley’s tourism economy is gaining traction after more than two years battling the pandemic.

“I think the key point I want to make here is that we are recovering in a very sustainable way,” said Linsey Gallagher, president and CEO of Visit Napa Valley. “We have seen our revenue recover with fewer people coming (because) they stayed longer and they spent more money, and that's the most sustainable outcome that we could ever have hoped for.”

At its low point during the pandemic, when hotel stays were off-limits, Visit Napa Valley’s revenue dropped by 65%, Gallagher said. That’s because its funding comes from a transient occupancy tax (TOT) — an assessment on overnight stays.

“So, at the end of the day, we're happy to still be here,” she said. “And we're happy that people came back to Napa Valley after a pretty crazy time over the last two years.”

Gallagher spoke at the Business Journal’s Impact Napa event, held Oct. 13 at the Napa Valley Welcome Center in downtown Napa. She was joined by Whitney Diver McEvoy, president and CEO of the Yountville Chamber of Commerce, whose organization also serves the broader Napa business community.

Diver McEvoy noted new businesses have been opening in downtown Napa, including several women-owned enterprises, and a number of retail businesses have been sprouting up in Yountville.

“It’s all very positive, but there’s definitely an undercurrent of uncertainty,” Diver McEvoy said, explaining tourism over the summer was slower than expected but that visitation has picked up in September and, so far, in October. “We’re definitely still feeling the lack of visitation, perhaps from our friends who usually come from Asia or who come from Europe.” That also includes Americans who have resumed traveling to Europe, she added.

Diver McEvoy and Gallagher also spoke about efforts underway to address workforce development programs in partnership with educational and business leaders across the county.

For Napa, it’s really one industry that needs the most workers.

“For a number of reasons, hospitality is lagging in recovery,” Gallagher said. “And let's address the elephant in the room: Housing is expensive here in Napa County. So even in the best-case scenario, if we can attract talent, we have to be able for them to find (affordable) housing.”

During the question-and-answer session, an attendee pushed harder on the topic of workforce development, stating it’s more important than marketing.

Gallagher responded, explaining why focusing on marketing continues to be important, especially after what she heard at a recent statewide tourism marketing conference.

“The reality is … everybody has their sights on the Napa Valley,” Gallagher said. “We are firmly at the top of a very competitive heap, and everybody is trying to figure out how to knock us off. So, I would argue that now more than ever, we have to reinforce why people should come to Napa Valley.”

Another attendee said people are balking at the high cost of coming to Napa, whether for the day or overnight.

In response, Gallagher said that while there are many luxury hotels in Napa, there are more than 5,500 hotel rooms in the county and not all of them are expensive.

“There's a lot of wonderful offerings out there,” she said. “And I think we just all need to work together on boosting awareness for the diversity of lodging products, the diversity of tasting-room experiences, and the diversity of restaurants, from a taco truck to the French Laundry.”

The presenting partner for the Business Journal’s Impact Napa event was Bank of Marin. Gold partners were Ghilotti Construction and the law firm of Dickenson Peatman & Fogarty (dp&f).

Cheryl Sarfaty covers tourism, hospitality, health care and employment. She previously worked for a Gannett daily newspaper in New Jersey and NJBIZ, the state’s business journal. Cheryl has freelanced for business journals in Sacramento, Silicon Valley, San Francisco and Lehigh Valley, Pennsylvania. She has a bachelor’s degree in journalism from California State University, Northridge. Reach her at cheryl.sarfaty@busjrnl.com or 707-521-4259.