Domestic and International Travelers Offer Municipalities Abundance of Opportunities

Sunny weather, beaches and Disneyland are often the first things that come to mind when people think of traveling to California. But as most Californians will tell you, it’s much more than that. From the Central Valley to the Silicon Valley, the State’s unique mix of leisure, culture and commerce work together to draw in more than 250 million visitors each year.

City and county leaders understand, better than most, the impacts travelers have on their communities. They pay close attention to the sales taxes and hotel taxes visitors generate for their municipality; annual revenue that can easily exceed a million dollars even in a small city.

“California has long been a tourist destination, but of the 269 million trips people made to the State last year, 49 million were for business,” said Fran Mancia, vice president of government affairs for MuniServices, one of the nation’s leading municipal tax auditing firms.

According to Visit California, a non-profit dedicated to promoting the State as a business and leisure destination, travelers spent more than $126 billion across California in 2016, a 3.1 percent increase over 2015. But, what should be of more interest to local leaders is that travel spending is expected to increase by more than 4 percent annually over the next three years.

“The reality is, cities and counties need to make smart investments and create policies that will bolster their local businesses – look for win-wins,” said Julia Erdkamp, a client services manager for MuniServices in Southern California. “For example, vacation rental platforms like Airbnb may seem like a nuisance to some, but studies have shown that travelers who utilize these platforms spend more money at local businesses within the jurisdiction when compared to standard hotels.”

While more than half of the tax revenue generated from travel spending went back to the State ($5.3 billion), $4.9 billion was distributed back to local cities and counties. And that doesn’t take into account the number of local jobs travelers support – 1.1 million in 2016.

“It’s a false assumption that only the destination cities benefit from the travel and tourism,” said Mancia. “Cities and counties don’t need to be Anaheim or San Francisco to attract travelers, but they do need to create the right social and economic environments”