Forecast: Local tourism, tech could take a hit

September 24, 2008 7:24:46 PM PDT
With storm clouds brewing over the national economy, what does this mean to San Francisco where tourism and technology could be battered in the coming months?

San Francisco welcomes more than 16 million visitors a year. Seventy-two thousand people make a living from tourism, so an economic downturn would pack a big punch.

2008 has been a strong year for tourism and conventions, pumping an estimated $8.2 billion into the economy, and this week is particularly good.

There are three cruise ships in port, allowing more than 8,000 passengers to spend their money here.

"These passengers typically spend $111 of which $85 is typically in food and the remainder is in purchases of t-shirts and that types of things," said Gerard Roybal, Port Maritime marketing manager.

But next year, the number of ships calling on San Francisco will drop from 59 to about 50. The cost of fuel is a factor.

While cruise passengers are important, the mother lode of visitor impact are people like the ones attending conventions, like the Oracle World Conference this week. They typically spend $290 a day, and that doesn't even include hotel rooms.

Major meetings and conventions are typically booked years in advance. San Francisco counts heavily on them, rather than business travel.

"On the hotel side, it's about 75 percent of leisure travelers and convention and meeting travelers as opposed to business travelers, that's only about a quarter of the market. That's the most volatile part of the whole visitor industry," said Leonard Hoops with the San Francisco Convention & Visitors Bureau.

Urban Tavern, a new restaurant at the San Francisco Hilton, is packed. The hotel is sold out, thanks to Oracle's conference. Even bookings for early next year look promising.

"Advanced bookings have been way ahead of traditional pace, and even into next year, we're already about 13 percent of where we had been going into this year," said Scott Baublitz, Hilton sales and marketing director.

High-tech is showing some warning signs. The trade group AEA says California technology exports totaled $48.2 billion last year -- a drop of $3.5 billion.

Still, former eBay CEO Meg Whitman, now an advisor to the John McCain campaign, is bullish on Silicon Valley's future.

"If you want the very best technical people in the world... the most experienced search people, the most experienced UI people, you come right here to Silicon Valley," said Whitman.

Tech and tourism are reallly intertwined this week with the Oracle Conference. The impact of the conference is estimated to be $100 million. That doesn't even include the performance fees for musical headliners Elvis Costello, Seal UB40 and Alan Jackson.


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