01/07/09, 17:26:04 UTC

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S.F. sees surge in tourism, conventions

bizjournals.com

Right on the heels of record-breaking tourism numbers, San Francisco is poised to have its biggest convention season in at least five years, keeping city hotels filled to the brim.

Next year promises to be by far the most robust for business and leisure travel in San Francisco since the dot-com boom.

Convention business will reach more than 900,000 hotel room nights in 2008, well above the 740,000 room nights booked by conventions in 2007, according to end-of-fiscal-year projections released by the San Francisco Convention and Visitors Bureau.

At the same time, overall tourism should total about 16 million visitors, 2 million more than the last time convention business reached such heights, in 2003.

Taken together, the simultaneous surge in both leisure and convention travel promise a remarkably lucrative year for city hotels, restaurants and shops, likely surpassing last year's all-time record of $7.8 billion in visitor spending.

"There is definitely more leisure travel into San Francisco, both domestically and on the international side," said Dan Kelleher, general manager of the 1,500-room San Francisco Marriott. "Rate is up."

The average San Francisco hotel room got $7.50 per night more expensive in the first half of the year, according to PKF Consulting, costing $176.

The Marriott has boosted its rates in the past year, though the increase is still slightly below the citywide average, since some of the hotel's rooms are locked in to contracts with corporate clients and convention groups.

International travelers are coming to San Francisco to take advantage of the weak dollar, including overseas travelers predominately from the United Kingdom and also, increasingly, Canadian tourists, who have seen their currency reach near-parity with the dollar, according to the San Francisco Hilton's sales director, Scott Baublitz.

Domestic travel, meanwhile, is up, thanks in part to the trend toward shorter vacations that do not involve airports and airlines, a trend that has helped the Marriott pick up visitors from Arizona and Southern California.

The surge of convention business will compress the market even tighter, particularly when each of four monster shows are in town: Oracle's annual OpenWorld and the annual meetings of the Academy of Orthopaedic Surgeons, National Automobile Dealers Association and the American College of Surgeons.

Furthering pressuring rates is a steady, if modest, increase in individual business travel, which remains the weakest but potentially most lucrative of the city's three visitor segments, which also include tourists and conventioneers.

"We see business travel starting to grow," said Baublitz of the Hilton. "You see the development of new office space, (and) we have signs of companies moving into the city."

"That is going to push the bubble and push everything up. Finally, San Francisco is back. It took a little while."

 Printable Version  | published Aug 30, 2007