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ECONOMY

Tourist visits for state and Napa Valley may not see full recovery until 2023 ... or later

First Street tourism

Visitors walk along First Street in downtown Napa in 2019. California is projected to see a 42% decline in visitation this year, a study from Visit California shows. Though Napa Valley may not have suffered as steep a decline, projections show visitation will not fully recover until 2023, local experts say. 

Visitation to California is expected to decline more than 40% this year, according to a study released by the tourism advocacy nonprofit Visit California. The figure is in keeping with several of Napa Valley’s cities, which have reported similar declines.

The study projected California’s total visitation in 2020 to reach less than 161 million — an almost 44% decline from 2019 when 286 million tourists traveled to the state. Visitation will not again reach 2019 levels for at least another three years, the agency’s projections show.

Similarly, the study predicts, travel-related spending in the state “is not expect to reach pre-coronavirus levels until 2024.” Tourism spending in the state this year is expected to drop to $66.1 billion — less than half of 2019 levels — erasing “a decade of growth,” the study said.

Data from Visit Napa Valley in 2018, the most recent available, showed visitation to Napa Valley that year reached 3.85 million. The tourism industry in the region generated $2.23 billion inside of Napa County, with almost 70% of that revenue coming from overnight hotel guests.

Though visitation data for 2020 is not yet available, Visit Napa Valley has been tracking hotel occupancy through the course of the pandemic. Those numbers, President & CEO Linsey Gallagher told the Register in November, show the region as having “hovered” at about 50% occupancy through the course of the year.

Amid comprehensive spring lockdowns earlier this year, Napa Valley’s occupancy rate plunged to unprecedented lows, dipping to just 13% in late March. It recovered significantly during the early summer season, climbing as high as 80% some summer weekends, Gallagher said.

On Thursday, Gov. Gavin Newsom announced a new stringent set of shutdown orders for regions of the state with less than 15% ICU capacity. If Napa County is affected later this month, wineries and bars must close, and restaurants must revert to doing take-out orders only.

The order would be another blow to the region’s beleaguered wine and hospitality industries, which also suffered at the hands of chaotic, destructive wildfires over the late summer.

Gallagher said projections show Napa Valley recovering at a similar pace as the state — in about three to five years, she said in November.

“That is certainly concerning, and it has significant implications for that three to five year period … on each of our towns, as well as at the county level,” Gallagher added. The hospitality and wine industries are the region’s first- and second-largest employers, respectively, and revenue generated from transient occupancy tax (TOT), levied on hotels and short-term rentals, funds significant portions of city budgets county-wide.

Still, Visit California’s study projects visitation to the state rebounding sharply in 2021, climbing sharply by 42% to an estimated 228.4 million.

Investors and would-be travelers have been made optimistic by positive news about vaccine distribution in 2021.

Newsom announced at the end of November the state would receive 327,000 doses of a coronavirus vaccine from Pfizer later this month.

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You can reach Sarah Klearman at (707) 256-2213 or sklearman@napanews.com.

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Wine Industry Reporter

Wine industry reporter at the Napa Valley Register.

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