Fires likely slowed Sonoma tourism

Sonoma Valley tourism has expanded greatly over the last five years, though the October wildfires likely slowed recent growth, according to a study released by the Sonoma Valley Visitors Bureau this month.

An estimated 1.7 million visitors spent $376.7 million in the Valley in 2017, an increase of 1.2 percent over 2016 for both the number of visitors and dollars spent, according to the study by Tourism Economics, which is part of the economic research firm Oxford Economics.

Tourism spending jumped 4.8 percent statewide in 2017, according to an economic impact report by Visit California and Dean Runyan Associates released in May.

Hotel occupancy rates and average price growth in the Valley were down in 2017, which the report said was likely because of the October wildfires. The occupancy rate in the Valley fell by 4.5 percentage points to 73.4 percent in 2017. Demand for rooms fell 5.8 percent, while the number of hotel rooms stayed the same.

“If you look at 2017 on the surface, some of (the decline) is fire impact. There were almost three months of the year when there was going to be a lot of consternation about visiting the Valley given that the fire line was encroaching on some of the Valley’s major tourism assets,” said Robert Eyler, an economics professor at Sonoma State University.

The professor also said that as hotel rates and the cost of wine increased over the last decade, “the idea that there would be some tapering off of growth is not shocking.”

The number of visitors to the Valley jumped 6.1 percent in 2012, hitting 1.4 million, according to the study. Growth continued to be robust until 2016, when it increased only 3.7 percent, edging up just 1.2 percent in 2017.

Direct visitor spending sustained 2,173 jobs in 2017, or 11 percent of all jobs in the Valley, according to the study.

Direct spending refers to when people actually purchase something, for example paying for a night’s spending at a hotel. An example of indirect spending is a company serving the hotel industry, for example, a laundry that washes bedsheets and towels for four or five hotels.

“Tourism, hospitality, is an integral part of the regional Sonoma Valley economy,” said Tim Zahner, director of the Sonoma County Visitors Bureau. “Hospitality tends to produce more tax revenue in general than other industries. Lodging, for example, is taxed at 12 percent (in Sonoma). Think of the sales tax you pay at a restaurant.”

Measuring the tourist economy is a challenge, the report’s authors said. While most economic sectors such as financial services or construction are easily defined, tourism isn’t one single industry. As Zahner noted, tourists spend on retail items such as clothing, footwear, electronics and souvenirs.

Tourist dollars are also spent on entertainment and recreation including museums, parks and theaters, not to mention manufacturing, which in the Valley includes wine production. Transportation, accommodations and food and beverage are also deemed tourism-related industries.

Most of the money spent by tourists in the Valley – 73 percent – was spent in the City of Sonoma, according to the study. “Lodging, food and beverage and retail, transportation and recreation, tend to be the big things tourists spend on,” Zahner said. “All these things are clustered in the city.”

The report drew on visitor spending estimates for Sonoma County produced by Visit California and a visitor profile study developed by Destination Analysts for San Francisco Travel, which also included Sonoma visitors.

The analysts also used San Francisco Travel data on hotel rooms and data from the U.S. Census, the Bureau of Economic Analysis and the Bureau of Labor Statistics.

Reach Janis Mara at janis.mara@sonomanews.com.