California Governor Gavin Newsom stood atop the iconic Golden Gate Bridge to proudly proclaim that the state had achieved an “unprecedented” tourism spending record. However, upon closer examination, the truth reveals a different story. In reality, when accounting for inflation, tourism in California has actually declined by 14% compared to 2019.
Trusted news organizations like CBS and the San Francisco Chronicle shared the false claim.
“I am currently standing on the iconic Golden Gate Bridge, a symbol of America’s and California’s greatness. Today, I am thrilled to announce that the state of California has achieved record-breaking tourism numbers, with over $150 billion spent on tourism. This is an unprecedented milestone in our state’s history,” expressed Newsom enthusiastically in a video captured on the windy bridge.
In his press release, Governor Newsom, along with Visit California CEO Caroline Beteta, stated that tourism spending in 2023 had increased by 5.6% compared to 2022. This figure represents a 3.8% growth from the pre-pandemic levels of 2019. However, it is important to note that the figures mentioned in the Visit California report, which was referenced by Newsom, do not account for inflation. Since 2019, inflation has been around 19%.
According to the report, direct travel spending in 2023 witnessed a 5.6% increase in current dollars. However, when adjusted for inflation, travel spending in 2023 experienced a decline of 14% compared to the peak in 2019.
According to the report, travel-related tax revenues have seen a 3% increase since 2019, along with a significant 13.1% increase in travel industry earnings. However, it is important to note that these figures have not been adjusted for inflation. In real terms, tourism-related tax revenues have actually decreased by approximately 16%, while earnings for workers in the tourism industry have seen a decline of around 6%. This decline in revenue has contributed to California’s projected $73 billion deficit for the fiscal year 2024-2025.
State Senator Brian Dahle, a Republican from Bieber, expressed his skepticism regarding Governor Newsom’s calculations, stating that the numbers simply don’t add up. According to Senator Dahle, Senate District One heavily relies on tourism, and he believes that businesses in the area are not thriving as well as the Governor suggests. Senator Dahle considers these claims to be misleading tactics aimed at deceiving voters into thinking that Governor Newsom is performing well in his role.
Despite the significant decline in real spending, tax revenue, and wages, tourism-related jobs in California have rebounded to 98% of their peak levels in 2019. This indicates that there is still a demand for travel in the state, but both travelers and businesses are taking measures to reduce expenses.
According to The Center Square, John Kabateck, the California Director of the National Federation of Independent Business, expressed his viewpoint on the matter, stating, “At the end of the day, inflation is inflation, so these numbers don’t come out as glossy as our state leaders would like them to. But we do hope the governor and legislature will help California turn a corner and make us more business and tourist friendly.”
A spokesperson from Newsom’s office reached out to The Center Square after they did not respond at the time of publication.
According to a spokesperson at the governor’s office, despite attempts to downplay California’s achievements, the reality is that tourists continue to flock to our state, which is the 5th largest economy on the planet. The data further reinforces the appeal of California, given its status as the most populous state in the U.S.
According to the governor’s spokesperson, there has been a significant increase in leisure and hospitality jobs in California since April 2020, even during the COVID-19 lockdowns imposed by Newsom. Despite the state maintaining stringent COVID policies until June 15, 2021, longer than most other states, California managed to double the number of jobs in this sector.