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Santa Barbara region experiences summer economic post-pandemic plateau

SANTA BARBARA, Calif. - After two years of an economic boost post-pandemic, the Santa Barbara region is experiencing a decline in reported summer hotel stays and retail sales.

Monthly occupancy rates at hotels in the area were down compared to last summer. Visit Santa Barbara, the destination marketing organization for the Santa Barbara South Coast, reported a 7% decline in June, a 3% decline in July, and a 6% decline in August compared to last year.

The City of Santa Barbara's Financial Department said it took in 5% less in taxes from people staying in hotels and motels within the city between May and August compared to the same period last year. However, the department said this dip comes after an 11% increase in 2022 compared to 2021, and a 157% increase compared to 2020 during the same period.

"Therefore, the summer of 2023 points to a plateauing in activity versus the previous two years", the department said in a statement to News Channel.

Data from the Santa Barbara South Coast Chamber of Commerce on sales tax from regional retailers may also suggest a post-pandemic economic plateau. The Chamber's June report on taxable retail sales showed a nearly 4% increase compared to last year and more than a 26% increase compared to two years ago. However, the Chamber's July report showed a nearly 2% decrease in sales compared to last year.

From Carpinteria to Goleta, South Coast retail businesses reported approximately $777 million in sales in July 2023, $794 million in July 2022, and $636 million in July 2021.

Kathy Janega-Dykes, president/CEO of Visit Santa Barbara said the prolonged winter weather this year is the biggest contributing factor to fewer visitors to the region.

"It delayed the start of summer. We did not see summer arrive here in Santa Barbara until early July," said Janega-Dykes. "So for the first six months, we continued to see business conditions begin to deteriorate a bit and this is very much of a weather driven destination."

Santa Barbara hosted fewer weddings and conferences this summer compared to last summer. Since weddings and conferences are usually over multiple days and are really important for the local economy, Janega-Dykes says hotels and businesses are working to book more conferences and weddings in the fall months.

"September is starting to be actually more positive than the summer was," said Janega-Dykes. "Especially for meetings and conferences."

Visit Santa Barbara is already ramping up its promotion to the area ahead of the cooler months. The National Oceanic and Atmospheric Administration says El Nino is expected to be stronger this winter.

"Certainly our eyes are on the weather after summer ends," said Janega-Dykes. "We're cautious that the cool and damp weather may affect future bookings, but Visit Santa Barbara isn't taking anything for granted!"

The decline in hotel occupancy and retail sales may have had an impact on local restaurants. Angie's on State Street in Santa Barbara is expected to be closed for 8 to 12 weeks to revise its menu. Hollister Brewing Company closed its Goleta location last week.

Despite the decline in hotel stays and retail sales compared to last year, Santa Barbara Airport recently reported its busiest week since 2019.

On September 15, the airport reported an all-time peak day with 2,650 passengers through TSA checkpoints, and then surpassed that milestone on September 22 with 2,793 passengers.

"September is proving to be a great month for our local community members traveling through SBA," said Angi Daus, Santa Barbara Airport Marketing Supervisor.

Santa Barbara Airport recently announced the return of Delta Air Lines with daily nonstop services to Atlanta once a day and Salt Lake City twice a day starting June 7, 2024.

“We are looking forward to our hotels, restaurants, and attractions benefitting from business brought by these new flights,” said Janega-Dykes.

Article Topic Follows: Economy
money and business
Sales Tax
Santa Barbara

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