Recession could affect Bay Area tourism

February 21, 2008 7:07:02 PM PST
The fear of a recession is growing. That's according to a new "Zogby International" survey for the Reuters News Agency.

Fifty-four percent now say they expect a recession to hit this year -- that's up from 48-percent in January.

And although you'd think that would spell disaster for the bay area tourism trade, local officials are surprisingly optimistic.

San Francisco draws nearly 16 million visitors each year -- some for fun. Others for conventions or other business, and the $7.7 billion they spend supports almost 70,000 jobs.

Keeping that pace going is in question because of economic uncertainty.

Ken Goldstein is an economist at the conference board, which produces the monthly consumer confidence index.

"Some people are going to cut back, so some people who had planned a vacation are going to say, no, this is not the time. We're going to save that money. At the same time, some other folks are going to say, things are really bad, we deserve to take a break and they're going to go out and do more travel than they had planned to," said Conference Board Economist Ken Goldstein.

Experts told a convention and visitors bureau audience that the year ahead will show modest growth.

Hotels will maintain 78-percent occupancy. The weak dollar will stimulate more visitors from Canada, Mexico and Europe.

Targeted promotion will be done to attract more tourists from China, India and South Korea.

That effort will be helped by new non-stop flights linking Seoul, Mumbai and Guangzhou to SFO later this year.

Moscone Center, however, is showing its age. The oldest section, known as Moscone South, is 27 years old. It will need an infusion of cash.

"In the short term, we have to make sure that Moscone's immediate capital needs are met so that the air walls that are frayed or that some of the furniture that needs to be replaced is replaced. Long term, frankly, it is so successful -- one of the most successful convention centers in the United States -- and it's being outgrown. We have to look at ways to expand it," said Joe D'Alessandro from San Francisco Convention and Visitors Bureau.

Tourism promotion and facility upgrades are underwritten by visitors themselves with a 14-percenthotel tax. This year, that tax will raise $210 million.

To give you a sense of the optimism of the visitor industry, the 300 to 400 people attending the conference were asked to raise their hands if they think there will be a recession this year. Only one did so.