Skift Take

This finding is a win for the often under-appreciated tourism and hospitality industry, especially in a city in San Francisco where technology companies and "disruptive" travel companies tend to steal the spotlight. But keep it on the down-low: Tech companies don't react well when they're not considered 'special.'

San Francisco’s hotel industry generated $6.6 billion in direct and indirect spending in the region last year, making it the most important business sector in the city, according to economists.

In its first analysis in more than a decade of the financial impact hotels play here, the Bay Area Council Economic Institute determined that the industry contributes more to the city’s coffers — $300 million in total taxes — than any other business. The Bay Area Council is publicly and privately funded and consults on statewide commerce.

“Within the tourism sector, the hotel industry comprises a central position as the largest single industry tax revenue source in San Francisco,” Mayor Ed Lee said in a statement. “These hotel funds support vital city services, including public safety and health service programs that benefit all San Franciscans.”

The study, “The Economic Impact of San Francisco Hotels,” was released Thursday and found that the city’s 215 hotels provide 24,000 local jobs and that 57 percent of hotel employees live in San Francisco.

The report does not compare numbers with other popular tourism cities, nor are there recent years to draw contrasts.

“We plan to update the numbers from this year forward,” said Kevin Carroll, executive director of the Hotel Council, which worked with the institute on the report. “The study was important because it showed us how hotels drive even more business on the outside of the industry than it does on the inside. It helps everything from taxi services and restaurants to tour companies and employment.”

Almost 17 million people visited San Francisco last year — though not all of them stayed in hotels — making the city one of the top destinations in the nation, according to the San Francisco Travel Association, a trade organization.

Researchers from the Bay Area Council estimate that in 2012 San Francisco hotel guests spent $2.3 billion on items outside lodging, including food, shopping, transportation and sightseeing. In addition, hotels spent $160 million annually for construction and capital projects, gave $37 million to arts organizations such as the Grants for the Arts and $42 million in support to various area nonprofits, according to the report.

“As a major visitor hub, we knew the hotel industry was very important to the city,” said Tracey Grose, vice president of the Bay Area Council Economic Institute’s research division. “This helps us to see exactly how important tourism, specifically the contributions of hotels, has on the local economy.”

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(c)2013 the San Francisco Chronicle. Distributed by MCT Information Services.


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Photo credit: Looking down the Embarcadero at sunset in San Francisco. Curtis Fry / Flickr