Virginia’s largest city is well positioned to see its tourism industry grow, helping to diversify the region’s military-dependent economy, but traffic gridlock and increased competition from other states could become obstacles if they’re not addressed, officials said Monday.

Tourism is Virginia Beach’s second largest revenue generator, after defense spending, and the city drives more leisure travel visitation than any other city in the state, according to city officials. Virginia Beach primarily draws tourists to its oceanfront and bay beaches, for sporting events and for convention and business travel.

In an address at an oceanfront hotel, Virginia Beach Convention & Visitors Bureau Director Jim Ricketts said tourism spending in the city reached $1.28 billion in 2012. In the first three months of 2014, he said, the city has seen a 6 percent increase in tourism spending compared with the same period in 2012, which set records.

“We are on a roll as we move into the summer season,” Ricketts said.

Ricketts listed potential developments that could boost tourism in the future, including the possibility of an 18,000 seat arena at the oceanfront and a convention center headquarters hotel. But he also warned that competition for tourism spending is fierce and that traffic congestion continues to be a problem, particularly as tourists must wait in long traffic lines at bridge-tunnels to get to the city.

He said research indicates that the thing tourists like least about Virginia Beach is the traffic leading up to the city.

“We want Virginia Beach to be better connected to the entire Coastal Virginia region,” he said.

To that end, he said he supports extending light rail from Norfolk to Virginia Beach. Gov. Terry McAuliffe, who spoke after Ricketts, has committed to spending up to $200 million of state money to help make that happen.

McAuliffe said he’s well aware that transportation is a major problem when it comes to getting visitors in and out of the area. He said that’s one of the reasons he supports adding additional lanes to part of Interstate 64 east of Richmond to Hampton Roads, which drew heavy applause.

“Once we do that, I just think it’ll be spectacular for what we need to do on tourism,” he said.

With the possibility of Defense Department spending cuts always on the horizon, McAuliffe said he fully supports ideas that will diversify Virginia’s economy.

“We are the No. 1 recipient of DOD dollars. That’s great news until you start receiving cuts,” McAuliffe said.

He said boosting tourism is a natural way for Virginia Beach to achieve economic diversification.

Brock Vergakis can be reached at @BrockVergakis.

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Photo Credit: A wide shot of Virginia Beach. Jason Pratt / Flickr