Visit Napa Valley reports growth in tourism recovery

Napa Valley’s tourism economy continues to rebound from the pandemic, having recovered in some respects, but not quite yet in others.

That was the underlying theme of Visit Napa Valley’s Destination Symposium, held Sept. 28 at CIA at Copia in Napa.

“The turbulence of the pandemic is behind us, and while we haven’t fully regained 2019 levels of overnight occupancy, we have recovered and exceeded 2019 levels of revenue,” said Linsey Gallager, president and CEO of Visit Napa Valley. “This means that, while we have fewer travelers in the destination, those who are visiting are spending more money in Napa Valley.”

Before the pandemic, international travelers and domestic business travelers typically stayed longer and spent more money in Napa than domestic leisure travelers, Gallagher said.

“(Winning) back more than our fair share of group business, as well as meeting business and incentive business and (visitors) from international markets is key to our region, not just to maintain our existing patterns, but that's what's going to drive growth into the future,” Gallagher said. “We can't rely solely on the domestic leisure travelers to drive growth in the future.”

Looking at tourism recovery in terms of overnight stays, Napa’s year-to-date hotel occupancy through August was 61.5%, down 3.2% from a year earlier, but down 14% from pre-pandemic 2019, Gallagher said, citing data from travel industry analytics firm STR.

Visit Napa Valley entered its 2024 fiscal year on July 1 with a $9 million budget, according to the tourism organization.

The majority of Visit Napa Valley’s funding comes from a 2% transient occupancy tax, which is an assessment on gross short-term (less than 30 days) room rentals on lodging businesses within Napa Valley’s Tourism Improvement District.

“The total transient occupancy tax collected in Napa County during fiscal year 2023 hit a new high of $69 million, and exceeded 2019 revenue by $14 million,” Gallagher said. “That is visitor-paid money that directly contributes to the quality of life for Napa Valley residents.”

Spending for the current fiscal year has been allocated among six categories: marketing (50%); business development and sales (21%); welcome center (11%); general and administrative (11%); community relations (6%); and guest information network (1%).

Going further into the international and domestic business travel segments, recovery to pre-pandemic levels statewide is expected by 2025, Gallagher said, according to data from Visit California, the state’s tourism marketing agency.

Looking at the same data just in the Napa Valley, from a revenue or dollar-spend standpoint, revenue from international visitors is expected to return to 2019 levels next year, Gallagher said. However, business travel spend in the Valley is projected to return to pre-pandemic levels this year.

Key international tourism markets for Napa Valley, as well as the San Francisco Bay Area, include Mexico, Canada and the United Kingdom. Visitation from those countries are close to returning to 2019 levels in terms of visitor volume, Gallagher said.

But there is one country that historically has contributed the most to the regional economy.

“It's important to note that the San Francisco Bay Area remains reliant on visitors from China … and the recovery (time) for that remains quite unclear,” Gallagher said. “So until international travelers to the region start to more fully rebound, we're not going to have a full recovery at the San Francisco regional level.”

Earlier this year, Visit Napa Valley worked with a steering committee and other industry stakeholders to develop a 3-year business plan that maps out objectives and goals over the next three fiscal years, said Jennifer Dadesho, director of marketing.

Also laid out in the organization’s 2024 annual plan, Dadesho reported to attendees that 75% of Visit Napa Valley’s priorities over the next three years will be directed toward strategic marketing and sales programs; 10% each on collaborative destination management; another 10% dedicated to engaging with community stakeholders to promote the positive impacts of tourism on the local economy; and 5% toward Visit Napa Valley’s own development.

Tom Bensel, managing director for the Culinary Institute of America and the new chair for Visit Napa Valley’s Board of Directors, gave opening remarks. Also speaking briefly at the event was Sen. Bill Dodd, D-Napa, whom Gallagher announced had recently been presented with the “2023 California Travel Association Distinguished Proud Champion Award.”

Cheryl Sarfaty covers tourism, hospitality, health care and employment. Reach her at cheryl.sarfaty@busjrnl.com or 707-521-4259.