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Pacific Coast Business Times: Central Coast tourism grows despite hurdles

November 10, 2017
Santa Barbara, California – Published 11/10/2017
By Robert Shutt

The Central Coast has been regarded by many as one of the most desirable travel destinations in the world. With its beaches, parks and entertainment options, the area has no shortage of attractions and locals are reaping the benefits.

Tourists spent $126.3 billion in California in 2016, making it the seventh straight year of tourist spending growth.

“California’s top export is international visitor spending with the total spent by just international visitors topping out at $25.2 billion,” Caroline Beteta, president and CEO of Visit California, said at the Central Coast Economic Forecast on Nov. 3. “Agriculture came in at a close second of $20.69 billion.”

What Beteta and the rest of Visit California know is that destination promotion drives business, tourism invests in infrastructure and travel inspires business. Companies like to choose exciting destinations for national conventions and events.

By advertising some of the state’s best destination cities to that specific demographic, Visit California brings in tourism dollars and also attracts the business of companies that do not yet have headquarters or clients in California.

One phenomenon that is becoming more common in the tourism sector of California is the rise of ‘bleisure.’ Advertisers like Visit California have noticed and are promoting the idea that a trip to a meeting or convention in California can be a healthy mix of fun and work.

“About 33 percent of business travelers say events are a big factor in adding leisure time to business travel and the best events for this are festivals, sporting events and concerts,” Beteta said.

However, the state must begin to adapt and overcome hurdles if it wants to continue the trend of growth that tourism is helping along.

Much better transportation networks will soon be needed for those without cars.

Citizens and public officials will all have to work together to attract better airline service and build a better transportation infrastructure that can last.

To learn how to better appeal to international visitors, Visit California and many other advertisers are trying to determine what effects political climate can have on vacation decisions and how California is perceived by the rest of the U.S. and the world.

On the Central Coast, tourism is helping drive the economy forward. The largest absolute job gains in San Luis Obispo County were in leisure and hospitality with 680 new jobs created just within the last year.

“New business formation in San Luis Obispo County continues with establishment up 2.7 percent over the past year,” Robert Kleinheinz, economist and executive director of research at Beacon Economics LLC, said at the Central Coast Economic Forecast. “Taxable sales are also up this year.”

But the SLO County real estate market is also a good example of a negative overall trend that has been developing on the Central Coast for years now.

While median home prices remain high due to a lack of supply, job and income growth are driving demand.

Credit standards and high down payment requirements are some of the only things keeping demand in check. A similar market can be found in both Santa Barbara and Ventura counties.

If tourism continues to grow as it is, services and goods for those visitors will not be sufficient soon unless more housing becomes available to those workers who would provide them.

“There is a slow growth trajectory for the long run,” Kleinheinz said. “The long run also includes addressing the housing supply, preparing for the closure of Diablo Canyon and developing other industries so it is not all based in tourism and agriculture.”

The main problem Chris Thornberg of Beacon Economics LLC is worried about for the Central Coast is the labor force.

In Santa Barbara County, the labor force has dropped over the last two years and, in SLO County, it has only grown by a little less than 2 percent over the last two years.

Overall job growth is vastly outpacing the labor force, making it extremely difficult for companies to find qualified employees.

“California housing will constrain growth,” Thornberg said at the Radius Economic Forecast in Santa Barbara on Nov. 1. “We need to try and make sure we have the right conversations about the right issues, because that is how we keep things moving.”

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