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Report: California tourism economy cut in half in 2020 because of coronavirus pandemic

Proving to be an unwelcome visitor to travel economies like the North Bay, COVID-19 has slashed in half tourism spending in California.

Tourism spending is expected to plummet to $66.1 billion by the time Californians exit 2020. That’s a 54% drop from 2019’s high mark of $144.9 billion, which edged out 2018 by 3.2%, according to a Visit California report released by the state tourism bureau.

Recovery to reach pre-COVID-19 levels for the tourism economy is not expected until 2024, the report indicates. 2021 will see domestic travel return by 74%, while international visitor spending will just squeak by with 54% of 2019 figures.

“We’re not surprised. As far as tourism, this is what we’ve been hearing,” California Chamber of Commerce spokeswoman Denise Davis said. “It’s sad. California is so beautiful, but this is our reality.”

The coronavirus reckoning for public health and the economy has prompted many North Bay leaders in the hospitality and leisure industries to retool, scale down, expand in the street and lobby lawmakers for help.

The hope is the plights of and requests from hard-hit businesses like wineries don’t fall on deaf ears.

“We’ve been given a one-two punch this year with COVID and the wildfires. Some of these wineries have been holding on by a thread,” said V. Sattui Winery General Manager Tom Davies, who also serves on the Visit Napa Valley Board of Directors.

California experienced its worst fire year in history in 2020. The Glass Fire alone, which consumed almost 1,000 structures in the Napa Valley and beyond when it ignited near St. Helena last summer, decimated any chance of a notable recovery when lingering smoke held many visitors at bay.

But the looming threat of COVID-19 and its consequential shutdown orders remain the biggest impact by a year marked by business closures and job loss as well as fear and restrictions.

As time passes, conditions worsen with stimulus and assistance running out and California counties experiencing a surge in cases that has caused the state to backpedal.

Vintners seek help with restrictions

A coalition of concerned vintners plans to take up their grievances with Napa County with the aim of a relaxing of restrictions — some of which have been on the books for decades, Davies said.

With Davies among it, the group plans to take its proposal to the Board of Supervisors for possibly the Dec. 15 meeting. The document titled Rebuild Napa Valley calls for “emergency relief measures to protect jobs and stimulate a much-needed economic recovery in Napa County,” the language reads.

This is what the coalition requests:

  • Wine tasting and marketing events should be allowed based on and subject to infrastructure limitations such as parking and septic capacity.
  • Appointment tasting requirements should should be suspended.
  • Wine tasting hours should be extended to include mornings and evenings.
  • Tasting areas should be expanded to outdoor areas.

“We need to take away some hurdles of visitation,” Davies said. “This will help kick start the economy.”

Therefore, wineries will have a chance to thrive, keep staff on board and contribute to the local government’s reduced transient occupancy and sales tax collections.

Napa County officials were unavailable for comment as of press time.

“This is going to take a while to recover. We can’t live under these onerous regulations,” he said.

For instance, V. Sattui was forced to postpone hosting its more than 60 weddings planned on its grounds from 2020 to 2021. Now some of the events tied to its revenue stream have been delayed into 2022.

“If it becomes unsustainable, I think we’re at risk of losing a whole industry,” he said.

It’s the economy

No county appears to be immune to the troubling results of the pandemic.

The loss of jobs reported by the state’s WARN Act has not subsided. Layoffs recorded between July 1 and Nov. 18 have reached 2,060 for jobs across Marin, Napa, Sonoma, Solano and Mendocino counties, the recent WARN data indicated.

Napa County appears to have taken the biggest hit, with 870 jobs either reported as temporary or permanent layoffs. Given the circumstances, some companies present a surprise based on the industry they serve.

For example, REI, which has a store in Santa Rosa, reported 99 people experiencing job loss through a closure. Outdoor equipment has seen a surge in interest during shelter-in-place orders.

And even as health care takes front and center in fighting the pandemic, Mendocino Coast District Hospital reported 250 out of its Fort Bragg facility have been laid off permanently.

Some job loss mentions would not surprise. Meadowood Napa Valley laid off 265 workers on a temporary basis. The resort endured a devastating blaze that engulfed its famed restaurant during the Glass Fire, while at least 400 other tourism-related jobs at wineries and hotels were consumed in the aftermath of the COVID-19 crisis.

“We’re back to where we were when (the crisis) first happened,” said Judd Wallenbrock, president and CEO of C. Mondavi & Family. The company, which runs the Charles Krug Winery, lost $1 million this year in event proceeds due to the ongoing challenges that have stretched through most of the year.

The ongoing pain from this year has been felt by state lawmakers who represent the region.

“We’ve been living 2020 all year long. We know it’s not going to end well,” California Sen. Bill Dodd, D-Napa, told the Business Journal. “I’m not surprised by what I’m hearing. It’s staggering though and very challenging.”

His realism was laced with optimism for a better future, in particular, come 2024.

“My guess is, the tourism industry here is very sophisticated,” Dodd said, further predicting many businesses will increase their spending in marketing efforts. “The reality is we’re going to find creative ways to market our properties.”

He believes the difference in lost revenues may be at least partially made up by creativity and ingenuity. From a consumers’ perspective, pent-up demand may also help, as travelers have become a bit stir-crazy staying home for months and months.

That’s indeed the hope among businesses impacted by the teeter-totter crisis, including those in parallel valleys from one side of the Wine Country to the other.

Cold reality of the viral resurgence

Many businesses have been forced to seek solace in operating outside.

The quest for outside tourism has helped Safari West, despite its shutdown and reduction in programs.

“We’re on the other end of the spectrum,” the Sonoma County wild animal park’s Executive Director Keo Hornbostel said. “People have wanted to do outside activities.”

And as much as the region needs rain, the lack of it so far this winter has helped his cause to serve these customers seeking space and outdoor excursions.

But even with moving an operation outdoors, how does a business endure such a long-lasting loss that expects to stretch for years?

“In the last seven months, we’ve had to keep adjusting. Our first gut instinct was to shutdown as much as possible to not waste money,” said Sondra Bernstein, owner and operator of the Girl and the Fig restaurant in downtown Sonoma.

Bernstein’s tight grip on expenses started with 150 people laid off in the early stages. The tightening led to a focus on curbside, which eliminates many servers and bartenders and “so much in labor costs,” she explained.

Bernstein also sold the food truck and farm during the crisis to reduce expenses. In addition, she collaborated with other eateries, thus developing a partnership with Wicked Slush in Healdsburg to offer unique cocktails.

The days that her daily Glen Ellen Café is open have scaled down by two days a week. It may turn into a three-day-a-week operation, she laments.

“This still pulls at my heartstrings,” she said.

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