Making steady but sure recovery towards the pre-pandemic peaks, the San Francisco expects 2 million overseas visitors this year, with focus on United Kingdom, Europe and India.

Demand for hotel rooms in San Francisco grew year-to-date by 15 pc, and hotel revenues rose by 30 pc. These are some of the findings in  updated 2023 Visitor and Lodging Forecast that was released by San Francisco Travel Association at the inaugural Visitor Impact Summit hosted by the Hotel Council and San Francisco Travel, recently.

According to a press statement, the average hotel occupancy in 2023 is projected to increase to 66.8 pc, up from 62 pc in 2022. Events and conventions have helped to drive lodging performance, with San Francisco’s premier convention and exhibition facility, Moscone Center, hosting 35 events and accounting for nearly 665,000 hotel room nights this year.

“Convention business has performed well, and the calendar is strong through mid-December with major events such as Dreamforce and APEC’s Economic Leaders’ Week and CEO Summit being held at Moscone Center. Events such as these draw tens of thousands of attendees, and APEC will place the city in the global spotlight,” says Joe D’Alessandro, San Francisco Travel’s President and CEO.

The statement says that hotel room inventory in the city is expected to grow by 4 pc this year compared to 2022. San Francisco hotels are forecast to achieve an average daily rate (ADR) of USD 246.09, up 7.7 pc from 2022, and a revenue-per-available room (RevPAR) of USD 164.29, an increase of 15.9 pc. Visitor volume to San Francisco is forecast to increase by 6.2 pc to 23.3 million, and visitor spending is forecast to reach USD 8.5 billion, up 13.9 pc from 2022.

However, while San Francisco’s tourism industry is steadily recovering, San Francisco Travel said it does not expect tourism to exceed the industry’s record-breaking pre-pandemic levels for a few more years.

“San Francisco is still a great investment and still one of the world’s top tourist destinations. This fall’s upcoming APEC Conference gives San Francisco a great chance to shine on the world stage. Working together with our city leaders and hospitality partners, we will continue to lean into the City’s recovery,’’  says Alex Bastian, President & CEO of the Hotel Council of San Francisco.

“We are focused on ensuring a safe and welcoming city for our residents, workers and businesses, and visitors from around the world,” says Mayor London Breed. “Tourism is a major contributor to San Francisco’s economic recovery, and we are beginning to see strong improvements with people coming back. There is a renewed excitement and energy happening in the city and we will keep building on this momentum to ensure San Francisco remains a top global destination that is vibrant and thriving so that people will continue to visit and spend time in our city,” Breed adds.

The tourism board says that it expects nearly two million international visitors, a key segment of San Francisco’s tourism industry due to their longer length of stay and higher spending, are projected to spend USD 4.2 billion this year. The United Kingdom, Europe and India remain strong overseas visitor markets for San Francisco, while Mexico and Canada remain the city’s largest international visitor source markets.

Comparing August 2019 with August 2023, San Francisco International Airport (SFO) reports that 94 pc of weekly international flights have resumed, and weekly seat capacity is 93.6 pc of pre-pandemic levels. New airlines added to the SFO network this year include ITA Airways, Norse Atlantic and ZIPAir, flying from Rome, London and Tokyo, respectively. SFO is now served by 40 international carriers and will increase to 41 with the addition of Starlux flying from Taipei in December 2023. Prior to the pandemic, SFO was served by 43 international carriers.

San Francisco Travel expects to see Asian inbound visitation grow further in 2024 following last week’s announcements that China had lifted restrictions on group tours to the United States and weekly flights between China and the US will double starting in September.

United Airlines has already announced plans to relaunch service from SFO to Beijing in November and increase service to Shanghai in October with daily nonstops from SFO. In 2019, 518,000 visitors from China accounted for USD 1.2 billion in visitor spending in San Francisco and the Peninsula.

Continued growth in international and domestic leisure and business travel will drive San Francisco’s ongoing tourism recovery in 2024. Visitor volume is expected to reach 24.3 million, with 2.3 million international visitors forecast to contribute USD 4.8 billion of the anticipated USD 9.4 billion in total visitor spending.

Moscone Center is slated to host 21 events accounting for 426,951 hotel room nights, down 34 pc compared to 2023. “Since 2019, we have been reporting 2024 would be a more challenging year for conventions given some cancellations and it being an off year for rotational events. But every year after 2024 shows steady growth in conventions, with 2028 and beyond trending to be above 90% of the average,” said D’Alessandro.

To attract more events to Moscone Center in future years, San Francisco Travel is leveraging the existing Moscone Recovery Fund and the 0.25 pc TID increase that goes into effect in 2024. These shorter-lead meetings will take place at hotels and event venues in the Bay Area, primarily in 2023 and 2024 in San Francisco. The 2024 lodging outlook projects a hotel occupancy of 68.1 pc and an Average Daily Rate (ADR) of USD 252.59.