As S.F. travel industry recovers, no rebound yet in tourism from China

But one crucial group is still missing, industry experts said: those from China.

“The big hole is China,” said Joe D’Alessandro, chief executive officer of San Francisco Travel, the city’s tourism bureau. “China was our No. 1  market in terms of spending in 2019, and this year, it is less than half of where we were then.”

In 2019, 518,000 of San Francisco’s 4.3 million international visitors were from China, according to data provided by SF Travel. Though visitors from Mexico outnumbered them by about 100,000, visitors from China spent the most of any group, accounting for $1.2 billion of the $7.7 billion international tourists spent in the city that year.

This year, visitors from China are expected to number only one-fifth of their 2019 total, and expected to spend just under $450 million. That brings the city’s total international visitor spending down from 2019’s $7.7 billion to an expected $5.9 billion in 2023. 

Those dollars are critical in a city that relies heavily on spending from international visitors — in 2019, 64% of travel spending in San Francisco came from people arriving from outside the U.S., D’Alessandro said, the highest percentage of any major city in the country. The travel and hospitality industry overall was the city’s largest private industry in 2019, according to the bureau, and now supports 53,000 jobs, down from 86,000 in 2019.

China’s zero COVID policy, which restricted travel outside the country until December last year, and diplomatic tensions between the U.S. and China have suppressed a rebound in travel from the country — and it is unclear when those tensions will ease, D’Alessandro said, though he expects tourism numbers to increase over time.

Those tensions are playing out in the availability of flights between China and the U.S. In 2019, there were an average of 53 flights per week to mainland China, making an average of 15,000 seats per week, according to SFO spokesperson Doug Yakel. Now, government restrictions limit the number of flights between the U.S. and China to 12 per week. SFO has a third of those flights, which means four flights per week, with 1,400 seats, he said. 

Visitors from China are not expected to return to 2019 numbers for at least the next three years, according to data provided by SF Travel, but other groups are expected to make up for that: By 2025, tourism from Mexico, Canada, several European countries, and Asian countries like India, Korea, Taiwan and Japan are expected to surpass their 2019 levels, bringing overall tourism levels above the 2019 total as well.

Yakel noted that SFO has already seen increased flight service to Australia, Tahiti, Singapore, Japan, Germany, Italy, Switzerland and the U.K. compared to 2019.

Those who work in San Francisco’s hospitality industry serving tourists are hopeful.

Bob Patrite, chief operating officer of Simco Restaurants, which operated five restaurants and one coffee shop on Pier 39, said across the business, numbers this year have been similar to 2019 levels, and tourists from Europe, Canada and Mexico are back in a big way.

“I’ve been really pleased,” he said.

While many travelers from Asia are still not returning in their former numbers, he said, they come in waves depending on the schedule of conventions and conferences being held in the city, and he’s optimistic those numbers will recover in time.

When that happens, he said, the city’s tourism industry will be even better than it was before the pandemic.

“We’re going to be above pre-pandemic levels if we have the same level of traffic we do now with the return of Asia on top of that,” he said.

Alex Bastian, the president and CEO of the San Francisco Hotel Council, said the slow return of Chinese visitors has hit the hotel industry hard — hotel occupancy rates and revenues are each around 75% of 2019 levels, according to the city controller’s report — but the rebound and growth in travel from other places like Europe, Mexico and Canada are a step in the right direction.

“Things are looking very promising,” he said. 

And the travel industry’s recovery will be key to the city’s recovery, he said. Diplomatic progress on the international front as well as continued investments in local infrastructure like San Francisco’s airport are good ways of getting there, he added.

“The one sure way we can come back sooner, better and stronger is by doubling down on hospitality and doubling down on travel,” Bastian said. “The energy from tourists gets back into our city.”

One thing that both travel industry experts and tourists who spoke with The Chronicle this week agreed on is that despite the negative headlines about crime, drugs and homelessness, a struggling downtown economy and high-profile store closures, San Francisco is a great place to visit. According to SF Travel, 92% of visitors it surveyed last year said they’d like to come back.

Tourists who spoke to The Chronicle this week — many of whom had either been to San Francisco before, had relatives here or were encouraged to visit by family or friends who’d previously been — were excited to see the city’s renowned destinations, and all said they’d return for a second visit if they could.

“This is the most European city in America,” Belgian tourist Patrick Xhenseval said on a sunny Tuesday morning in front of the cable car turnaround at Market and Powell streets, where people speaking a mix of languages waited in line for an $8 ride on the iconic train. “The atmosphere, the buildings. … It’s a very nice city.”

Xhenseval, visiting with his wife, Vicky, and teenage daughters, Eva and Lisa, was on a two-week trip to the United States, including stops at several national parks, Los Angeles and San Francisco. Patrick and Vicky had been to San Francisco 27 years ago on their honeymoon and wanted to return with their daughters.