Sonoma County tourism recovering, but regaining pre-pandemic enthusiasm still a challenge

GARY QUACKENBUSH
FOR THE NORTH BAY BUSINESS JOURNAL

What’s the real cost of inflation for Sonoma County businesses?

This is part of a series of reports on the impacts of rising prices on the local economy. Each is a summary of presentations by industry leaders during the July meeting of business advocacy group Sonoma County Alliance.

Tourism revenues are back to near pre-pandemic levels as more people want to see friends and family driven by discretionary saved income.

“Overall, the volume of tourism has exploded, except when it comes to business travel,” said Claudia Vecchio, president and CEO with Sonoma County Tourism Bureau Inc. “We are still five years behind when it comes to regaining losses in recent years.”

Revenues from tourism showed a marked improvement in 2021 with annual traveler spending in Sonoma County of $1,969 billion, but still trails behind 2016, according to Dean Runyon Associates. However, business travel spending is down.

“We have a way to go to reach the pre-pandemic 2019 level of $2.237 billion, which shrunk by almost 50% to a low of $1.25 billion in 2020. However, the annual percentage change in direct travel impact from 2020 to 2021 represents growth of +57.5%. Accommodation revenue from 2020 to 2021 represented a rise of +82.8% from $299 million in 2020 to $547 million in 2021,“ said Claudia Vecchio, president/CEO with Sonoma County Tourism Bureau, Inc.

High inflation will continue to erode household savings and recession fears will weigh on travel sentiment. Also, labor shortages are expected to limit some available travel services.

On the plus side, lessening impacts from COVID, rising incomes and accumulated household savings should help to unleash remaining pent-up travel demand from both the leisure and business segments, at least in the short term, according to a U.S.Travel Association research update in May.

Added Vecchio, “Our marketing efforts are focusing on attracting tourists from farther away, from Dallas or the Pacific Northwest, for examples, rather than day-trippers, because those coming from a distance need accommodations and other amenities and may stay longer to increase county-based tourism revenue totals. Over the next six months we will monitor how inflation has impacted the desire to travel.

We believe travel is a right, not a privilege, but uncertainty is the enemy of travel,” she added. “The rise in gas prices, air fares and hotel rates are high, but we expect them to soften in 2023.”

What’s the real cost of inflation for Sonoma County businesses?

This is part of a series of reports on the impacts of rising prices on the local economy. Each is a summary of presentations by industry leaders during the July meeting of business advocacy group Sonoma County Alliance.

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