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San Francisco Hotels Make Big Economic Impact

San Francisco Hotels Make Big Economic Impact

The hospitality and tourism industry is a vital part of the U.S. economy. In 2012, it supported nearly 7.7 million jobs and generated $855.4 billion in travel spending. And hotels remain a large part of the equation by contributing to the economic well-being of cities and communities across the country.

One city in particular that is gaining substantial economic benefits from the hotel industry is San Francisco. According to a recent analysis performed by the Bay Area Council Economic Institute for the Hotel Council of San Francisco, city hotels contributed $6.6 billion in economic activity last year alone.

“The hotel council came to us because they were interested in better understanding their role in the city’s economy,” says Tracey Grose, vice president of the Bay Area Council Economic Institute. “This was originally conceived to be a relatively narrow economic impact analysis.”

But the research led to surprising insights about the industry’s overall contributions. San Francisco is home to 215 hotels, comprised of 33,642 rooms. In 2012, hotels paid $300 million in total taxes, of which $200 million went directly to the city’s general fund. That makes it the largest single contributor to the fund in the city. Data also showed that hotels generate $3 billion in economic activity outside of their properties by promoting travel spending on food, retail, and transportation.

Besides contributing huge amounts in taxes and spending, the hotel industry remains a major supplier of jobs for local residents. Even with the city’s recent tech boom and the need for highly skilled, technologically savvy professionals, the hotel industry continues to employ people across all levels of education and experience. The industry supported 24,000 local jobs in 2012, and the study found that 57 percent of hotel employees live in the city—a higher percentage than in most industries. San Francisco hotel workers also tend to stay in the same job 33 percent longer than workers in hotels nationwide.

“We do have these new industries moving in and they have certain patterns of hiring, but [the hotel industry] is hiring locals across all skill levels,” says Grose. “Not only are the hotels hiring a variety of people, but they must be offering good jobs because people want to stay.”

Through the Grants for the Arts/San Francisco Hotel Tax Fund, city hotels also made a significant investment in local arts organizations. In 2012, hotels contributed $37 million to fostering theater, dance, music, and cultural programs in the city.

“These hotel funds provide essential revenues for the beloved cultural institutions, museums, and arts programs that make San Francisco so extraordinary and unique,” said Mayor Edwin M. Lee in a statement. “I look forward to a continued strong partnership between the hotel industry and the City of San Francisco.”

Grose says the study’s findings reveal how important hotels are to the city as tourism continues to be a dominant economic force. “Our visitor industry is very strong,” says Grose. “The key takeaway is that the hotel industry in San Francisco makes an extremely valuable contribution. It’s driving economic activity, contributing hugely to the city’s tax revenue, offering jobs to a range of skill levels, and giving back to the community.”

Photo credit: San Francisco Skyline via Bigstock

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