The San Francisco Travel Association (SFTA) forecasted marked increases in visitor volume, visitor spending, group business and hotel occupancy this year compared to 2021 at its Annual Visitor and Lodging Forecast Forum.
According to the association’s latest projections, San Francisco will receive 21.5 million visitors in 2022 compared to 2021’s 17 million visitors, an increase of 26.5%. Visitor spending is forecast to be up 89.3% in 2022 to $6.7 billion, but down 30.2% compared to 2019, when the city had a record 26.2 million visitors and $9.6 billion in visitor spending.
“We are clearly on the road to recovery, but we still have a way to go before we will reach pre-pandemic tourism levels. San Francisco will not see a full recovery until travelers from Asia return and business travel and group business increases,” said Joe D’Alessandro, San Francisco Travel’s president and CEO.
Factors driving this year’s recovery include an increased volume of domestic overnight and international visitors. In 2022, more than 6.9 million domestic overnight visitors are expected, an increase of 33% compared to 2021. The forecast reports San Francisco will see 1.5 million international visitors, a 163% increase over the previous year.
According to data provided by Tourism Economics, overnight domestic business travel has grown 134% compared to 2021, and spending is up 152%, but both are down more than 30% compared to 2019.
The outlook for 2023 anticipates sustained gains with an estimated 24.5 million visitors and $8.9 billion in visitor spending. San Francisco Travel’s current projections indicate visitor spending will not return to pre-pandemic levels until 2024, and global visitation will not reach 2019 levels until 2025.
Compared with 2019, international visitor volume is down 50%, with only half of 2019’s three million overnight international visitors projected in 2022. The return of international travelers is critical for San Francisco’s continued economic recovery. International overnight visitors accounted for $5.1 billion of the $9.6 billion in overall visitor spending in 2019. This year, international overnight visitors are expected to contribute 46% ($3.1 billion) of the $6.7 billion in visitor spending.
“One of our key priorities is driving increased international visitation as this segment stays the longest and spends the most,” said D’Alessandro. “We are pleased to see an increased number of visitors from countries we’ve focused our marketing efforts on this year given ongoing travel restrictions in parts of Asia.”
According to data provided by Oxford Economics, the top international inbound markets for San Francisco’s visitor volume are Mexico (up 51%), the UK (up 666%), Canada (up 499%), Germany (up 226%) and India ( up 142%). The top overseas markets also include France (up 412%) and Australia (up 798%). The US government lifted Covid-19 travel restrictions for fully vaccinated international travelers on Nov. 8, 2021.
Data from Amadeus/TravelClick shows the states outside of California driving the most visitor volume to the city are Texas, New York, Florida, Washington, and Illinois.
Regional Visitor Growth Up 21.4%
Visitor growth for the entire region, including the Peninsula, the East Bay, Marin, and wine country (Napa and Sonoma counties), is projected to be 49.8 million this year compared to 41 million visitors in 2021 and 57.7 million in 2019. Regional visitor spending is forecast to be $14.3 billion compared to $9 billion in 2021 and $19.7 billion in 2019.
The city of San Francisco accounts for 45% of total regional volume and 49% of spending historically. The Peninsula and wine country are expected to record the highest volume of visitors in 2022 after San Francisco with 9.1 million and 8.7 million visitors, respectively.
In 2023, the regional forecast projects 54.5 million visitors and $17.8 billion in visitor spending.
Hotels See Increase in Occupancy, Average Daily Rate and Revenue Per Available Room
San Francisco’s ranking among the top 25 US hotel markets improved from 13th in 2021 to 5th for the month of June 2022. The city’s hotel occupancy is forecast to be 58.6% in 2022, a 67% increase compared to 2021 but still down 28.7% to 2019. The average daily rate (ADR) is projected to be $230.25, an increase of 41% compared to last year but down 16% from 2019. Revenue per available hotel room (RevPar) is projected to increase 104% compared to 2021 but remains down 37.4% from 2019.
In 2023, San Francisco Travel is forecasting further improvement. Occupancy is projected to be 72.5% with an ADR of $252.62 and a RevPar of $183.10. However, hotel occupancy is not expected to reach 2019 levels until 2025, although ADR is expected to slightly exceed 2019 figures by 2024.
Conventions Return to San Francisco
After the omicron Covid-19 variant negatively impacted the first quarter, business travel and conventions bounced back in the second quarter. Growth in conventions business was significant given Moscone Center reopened only in September 2021. Last year, five events were held at Moscone Center, with 16,500 attendees accounting for 17,100 room nights. This year, conventions at Moscone Center are projected to account for nearly 350,000 room nights.
In 2022, 34 events are confirmed for Moscone Center with an expected 308,700 attendees. However, room nights tracked to citywide conventions remain well below pre-pandemic levels when 970,000 convention room nights updated.
Convention room nights on the books for 2023 are up 84% over this year, with 637,753 definite room nights and 25,678 tentative room nights.
San Francisco International Airport Forecasts Over 40 Million Passengers in 2022
SFO projects it will see over 40 million passengers in 2022, up ~16 million from the 24 million passengers seen in 2021. The airport forecasts it will return to 2019’s 58-million-annual-passenger-levels of traffic between 2024 and 2026.
This year SFO has seen a steady return of service with 38 international carriers operating there, including three new ones, Flair Airlines, Air Transat and Condor, plus one new domestic carrier, Breeze Airways. In 2019, SFO had the fourth largest number of international carriers operating at the airport compared to all US airports. This summer, SFO moved up to third place.
Passenger load factors have been high for most of the summer, with nearly every domestic seat filled. Europe, Mexico and Oceania have also seen extremely high load factors this summer. Capacity on Europe routes is largely recovered, with 93% of available seats this summer. Latin America is one of SFO’s strongest performing markets, nearly matching 2019 levels. Canada is close to 80% of pre-pandemic levels with strong demand to SFO after the borders fully reopened. The Middle East/India region is exceeding 2019 levels, and the Oceania region is at about 70% of 2019 levels but is expected to increase this winter.