COVID-19 Impact: Suffering SF tourism could mean program cuts or new taxes

SAN FRANCISO (KGO) -- Signs around San Francisco's Union Square say "Welcome, we are open," but visitors are few and far between, as tourism has faded during the coronavirus pandemic.

"One of the campaigns is our gate is open. Well, that gate just got closed two days ago," said Hotel G General Manager Steve Rizzo.

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Rizzo says the hotel has been closed for eight months. He estimates they've lost 8 to 12 million dollars in that time.

"I imagine a lot of places are in the same boat we are, which is eventually your cash flow runs out when you have no revenue source coming in," said Rizzo.

According to the quarterly San Francisco budget status report released this month by the Controller's Office, the hotel tax is expected to drop $43.4 million below the expected $126.2 million..

"One of the things that visitors really do, is they really help to pay our cost of living in San Francisco, and without them it's going to be noticeable for all of us frankly," said Joe D'Alessandro, President and CEO of the San Francisco Travel Association.

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San Francisco is taking a step back to the red tier due to an increase in COVID-19 cases. Last week, restaurants had to shut down indoor dining and now there are more restrictions for gyms and non-essential offices.

D'Alessandro says it's not just hotel tax. Visitors pay sales tax and car rental tax, that all go into the city's general fund.

"That pays for everything from parks and police to education and roads," said D'Alessandro.
Without that money --

"Programs will have to be cut or new taxes will have to be generated," D'Alessandro continued.

The budget status report predicts the hotel tax will not recover to its prior peak until mass gatherings for large conferences, sporting events or other major attractions are safe and attended at pre-pandemic levels by visitors traveling by air.

Rizzo says Hotel G will reopen, eventually.

"Our investors and owners see the bigger picture and despite what we may see right now in Union Square, we have every intention of re-opening as soon as we see a signal or some sort of trending for travel demand coming back to the city," said Rizzo.

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