Loosening of Foreign Air Travel Rules Adds Hope to San Diego Tourist Industry

Speaker 1: 00:00 Travel restrictions of one form or another have been in place now for about a year and a half due to the Corona virus pandemic, especially on international travel yesterday, the U S announced loosened travel restrictions for international travelers from over 30 countries. Starting this November, many foreign travelers will be able to visit the United States provided they have proof of vaccination. What does this mean for San Diego's tourism industry and its economy overall, joining me to help answer these questions is Ray major chief economist for the San Diego association of governments, better known as SANDAG. Uh, very welcome to you. Speaker 2: 00:39 Well, thank you very much. Good day to you. According to Speaker 1: 00:42 One industry trade group, the us tourism industry lost $500 billion in 2020 alone due to the Corona virus pandemic. Uh, can you put into perspective the impact the coronavirus pandemic has had on tourism in San Diego? Speaker 2: 00:57 Well, this pandemic has been devastating to the tourism industry, uh, both in regards to domestic travel and also international travel. The tourism industry pre COVID was about a $10 billion annual influx of capital or money into the San Diego region. And we had about 34 million people who used to visit here each and every year. San Diego is a world-class travel destination. About 10% of our total economy is made up of people who work in the tourism industry. So when you have an event like COVID and tourism is, is impacted almost completely, it has incredible effects on our economy. Speaker 1: 01:41 Now, these travel restrictions are for international travel. How much of San Diego's tourism dollars come from foreign travelers? Speaker 2: 01:49 Well, the, the bulk of the travel that's done, uh, into San Diego is, is domestic and business. But the international travel makes up a large component of the visitors to San Diego. Uh, we pre COVID had about a hundred thousand visitors that would come here each year for recreational purposes or to visit families. And that number is down to about 16,000 now. So that's an 83% drop in international passengers. And so that's really what we're talking about today is, is those people coming back and being able to come to San Diego to visit their friends and families and, and possibly do business here in the United States. The other thing about international travel is that those people who visit here from an international perspective spend a longer period of time in San Diego, and they spend significantly more money than people who come here as domestic visitors. Speaker 1: 02:42 I spoke to you about this around the same time. Last year. At that time, you estimated about 176,000 jobs have been lost as a result of the pandemic. Many of those in the tourism sector, have those jobs come back. Speaker 2: 02:56 Well, many of the jobs have come, especially the ones in restaurants, but the tourism industry is still down by about 35,500 jobs. And that represents about a quarter of the total that was there, pre COVID. So it is still the absolutely hardest hit industry, uh, in our region. Speaker 1: 03:17 These changes though, ultimately creating more tourism jobs in San Diego. Speaker 2: 03:22 I think that as the international passengers come back, that it'll help bolster tourism or the tourism jobs here in San Diego. I don't know that many of those jobs are going to come back because of the international passengers. Most of those jobs are probably more related to business travel. Speaker 1: 03:41 Oh, there's another side to these ease restrictions. They will apply only to air travel, uh, and not ground travel. What's the reasoning behind that distinction. And what does that mean for us here along the us Mexico border? Speaker 2: 03:55 Well, I don't know the specific answer to that, but if I had to guess it has to do with the fact that air travel is a little bit easier to intercept in the sense that they can mandate that you have a COVID test within a certain number of days before you get on the airliner and they know when you get off. And so they can also test when, when you land over here, it's a little bit easier to do that than it is with people who are just traveling across the border, which has a tremendous number of people who come across. But, uh, also there's, there's no control over who's coming in and when they're coming in and where they're going, Speaker 1: 04:30 Do we have any idea when the restrictions for land border crossings may be east? Speaker 2: 04:35 I do not have any idea when the land border crossing restrictions would be released, but I'm sure that a lot of this has to do with the COVID cases and being able to somehow prove that people are vaccinated. And I think that's going to be the most difficult part of land border crossings is that it's difficult to, uh, validate that that people have been vaccinated. Speaker 1: 04:56 These changes announced yesterday, won't take effect until November. So it is not like this will give an immediate boost to local businesses. How is local tourism looking today? Speaker 2: 05:07 Well, we had a relatively good summer season, so there were a lot of people who, who did travel domestically. So we had people came down from LA or came in from Arizona or other places in the United States and came to San Diego. So, so luckily we've, we've done relatively well from that perspective. And although this isn't, these restrictions aren't lifted until November. I think that what you're going to see is that a lot of the international passengers can now start to possibly plan a holiday in San Diego and San Diego has always been a great destination for people who want to travel during the winter. So January, February. So I think you're going to see an increase in the international travel as we go into the holiday season. And then as we go into the winter months, Speaker 1: 05:54 Obviously here along the border, our economic relationship with Mexico is about much more than tourism. What's the current outlook for our border regions economy for the rest of this year. Speaker 2: 06:05 Right now we've had essential workers being able to come across, uh, for most of the pandemic lockdown. Uh, we see more travel coming across in, in, in recent months and it's, it is very important to get the border region working. Again, there are a lot of jobs that are, uh, located in the United States that are held by people who live in Mexico and they need to be able to come across and do those jobs as well as companies here like Taylor guitars that relies on manufacturing in Mexico and needs to be able to move their goods back and forth across the border. So, uh, the, the restrictions that we currently have do keep our economy from really moving at full pace. Speaker 1: 06:49 Do you see any lasting changes on local tourism after this pandemic ends? Speaker 2: 06:56 You know, I, I hope that we can get back to a time where, where things are normal, but given the way that the COVID response has, has rolled out. And the fact that we keep seeing these new variants, I think is going to be a while, because before we get back to anything that would be close to a hundred percent normal with people traveling back and forth. But the thing that I'm always optimistic about is that San Diego is such a great tourist destination. And so whether it's domestic travel international travel or when business travel starts to come back, and that's the one that's going to take the longest that San Diego will be a destination that's at the top of the list for most people. And that our tourism industry will be able to recover to close to what we were before the pandemic hit. Speaker 1: 07:45 I've been speaking with SANDAG, chief data analytics, officer and chief economist, Ray major. Ray, thank you so much for joining. Speaker 2: 07:52 Yes, you're very welcome. Thank you for having me.