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Irvine’s Travel and Tourism Industry Vital to County’s Recovery

Monday, June 29, 2020

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By Bryan Starr, President and CEO, Greater Irvine Chamber, as published in the June 29 issue of the Orange County Business Journal. 

For the past four years, as president and CEO of the Greater Irvine Chamber, I have shared increasingly high figures year over year on Irvine’s traveler expenditures and how they impact the local economy—2019 numbers were no exception.

Last year, we saw yet another increase of 3.9% over 2018, bringing an estimated $781 million* in travel expenditures to Irvine’s economy. Orange County’s travel expenditures were nearly $6.3 billion.*

In 2019, the travel industry contributed $49.6 million in Irvine and California taxes. As a whole, Orange County contributed $477 million.

Without this visitor spending, it is estimated that resident households in Irvine would each pay $560 more a year in state and local taxes.

Transient Occupancy Taxes (TOT), paid by hotel guests, pay for local services and account for a large percentage of the local government and public safety spending. Without TOT, Irvine would not have the accredited educational system, public safety, and recreational and other amenities that residents and visitors value and enjoy.
Irvine’s travel industry-supported 5,860 Irvine jobs and was responsible for adding $267 million in wages to the local economy. In 2019, 55,200 jobs in Orange County were tourism-related.

These numbers illustrate the economic power of tourism to not only Irvine’s economy but the county’s.

And now here we are, six months into 2020 amidst a global pandemic and the travel numbers projected for this year are bleak.

As Orange County prepares to enter Stage III of reopening, the travel economy remains in a significant depression. In Irvine alone, the hotel occupancy is averaging well below 30% and travel spending is nearly 76% below last year’s levels.

Last month, the U.S. Travel Association stated that 51% of all tourism/hospitality workers nationwide are without jobs. Based on the national figures, that means more than 28,000 of Orange County employees are now unemployed. Apply that percentage to Irvine’s numbers and that means a staggering 2,988 Irvine employees are jobless.

These numbers do not just represent those who work in hotels, but includes those who work in restaurants, retail, attractions, rental car services, and other ancillary businesses related to tourism.

Tourism is one of the most accessible industries in which to work and boasts comparatively low barriers to entry. According to a Rand Corporation study, four in 10 workers were either unemployed or in school the year before coming to work in travel and tourism. Nationally, 38% of all first jobs were in travel and tourism, double the proportion of any other industry. Because tourism jobs provide employment opportunities outside of Irvine’s high-tech sectors—healthcare, life science, biomedicine, research, and technology—they are essential to the city’s diverse economic portfolio, which has been one of its greatest strengths.

As an industry hardest hit by the economic fallout, it’s become more apparent how vital tourism is and how it will help lead economic recovery for Orange County. It is more important than ever that California’s decision-makers acknowledge tourism as the powerhouse it is. The travel and tourism industry has driven recovery before by doing what it has always done – employing thousands and generating millions of dollars in local and state taxes.

Orange County’s destination marketing organizations provide critical economic development services for cities and are the engines of the local travel economy.

Destination Irvine, the destination marketing division of the Greater Irvine Chamber, and its marketing and sales initiatives play a strategic role in generating travel expenditures by bringing millions of visitors to Irvine, whether they are conference attendees, leisure travelers, or those attending or participating in a sporting event.

The Greater Irvine Chamber strongly encourages Governor Newsom to allow individual counties that provide a variance plan demonstrating their cities have taken the necessary protocols and meet the criteria set forth by the California Department of Public Health to advance travel for meetings and groups from Stage IV to Stage III, as the tourism industry is vital to the recovery of the state’s economy.

As Congress negotiates additional relief and stimulus measures, we must keep fighting to best position Orange County’s destination marketing organizations, our hoteliers, and tourism partners for recovery. The next phase of coronavirus response legislation must extend and enhance CARES Act relief, incentivize a safe restart of the travel economy, and support community-based economic recovery.

To help save the travel industry, visit the Greater Irvine Chamber’s government affairs page for information on contacting your local representatives www.greaterirvinechamber.com/advocacy

*According to the 2019 Visitor Impact reports conducted by Dean Runyan Associates, on behalf of Greater Irvine Chamber/Destination Irvine and Visit California. 

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