Santa Cruz County tourism industry marks state’s biggest post-pandemic recovery

Santa Cruz County’s tourism sector has had the strongest post-pandemic recovery rate of any county in the state, driven by more international visitors, the area’s ample outdoor activities and a rebound in business travel, among other factors.

In 2023, visitors spent $1.4 billion at the county’s hotels, restaurants, gas stations, stores and attractions, marking a 35% increase from 2019 pre-pandemic levels, the largest increase among California’s 58 counties. That’s the finding of a new report released by Visit California. 

By comparison, while more money was spent in nearby Monterey County in 2023 – around $3 billion – that county hasn’t yet seen a return to pre-pandemic levels. In 2019, visitors spent just over $3.2 billion.

Overall, travel spending in the state reached a record high of $150.4 billion in 2023, surpassing the previous record of $144.9 billion in 2019 and giving California the largest market share of tourism in the United States. Tourism continues to be one of the biggest job sources in the state, with the travel industry supporting around 1.2 million jobs in 2023. Locally, the travel industry accounts for more than 10,000 jobs. Of those, food service and lodging accounted for the majority – 6,160 jobs.

The report also showed that state and local tax revenue generated by tourism reached almost $123 million in the county last year. Aside from accommodations, travelers spent the most money on restaurants, food stores, arts and entertainment and retail, according to Christina Glynn, communications director for Visit Santa Cruz County. Travelers are defined as people who either stay overnight or come from more than 50 miles away.

Visit Santa Cruz County is the private, nonprofit corporation that’s focused on enhancing tourism and the local economy. It’s supported by what’s known as a tourism marketing district, a model in which funding comes from an assessment on local hotel rooms. 

Glynn said one reason that the county is seeing higher numbers than other places is that Visit Santa Cruz County has taken a methodical approach to expanding the market’s reach, targeting specific regions that match visitor interests with what Santa Cruz County has to offer. Canada, Germany and the United Kingdom have been the biggest focus for international markets, along with Australia. Mexico has also become a significant target for the organization’s marketing efforts. In recent years, Visit Santa Cruz County and its counterparts around the state have focused more on encouraging visitors to go beyond major cities like Los Angeles and San Francisco, and that trend was hastened by the pandemic as tourists sought out less-populated regions and places with more outdoor space.

“Aside from the domestic and international markets, we have nearly recovered in terms of the meetings and conference market,” said Glynn. “This is a critical segment of our industry, historically taking place post-season and helping to boost our hotels during those critical post-summer months. However, what we’ve seen emerge from the pandemic is a more flexible sector on a year-around basis with regard to in-person meetings.” 

The county’s extensive outdoor activities, including offerings for corporate team-building activities, have been one of the strongest draws, said Glynn. 

One of the area’s biggest attractions, of course, is the Santa Cruz Beach Boardwalk.

While this winter’s storms and ongoing gloomy weather put a slight damper on the crowds earlier this year, Boardwalk officials say they’re expecting a big summer season. 

“We’ve had a few more rainy weekends than we’d like thus far, but we expect a strong summer due to two new rides, celebrating the Giant Dipper’s 100th anniversary and a fun entertainment lineup,” said spokesman Kris Reyes. (As a privately held company, the Boardwalk doesn’t share financial data.)

The nearby Dream Inn got an extra boost this year from spring break and an early Easter, said Dan Smart, the hotel’s sales and marketing director. 

“We’re not just seeing the post-pandemic travel we saw in 2023, where it was a lot of visitors from Southern California and elsewhere in the state,” he said. “Now, we’re seeing people from Texas, Oregon, Washington and international locations.” 

While 90% of the Dream Inn’s business is “leisure travel,” Smart said they’ve also seen a return of what he calls “the university segment” — professors, instructors and researchers coming to town for symposiums and other events.

For 2024, the hotel is focusing much of its efforts on collaborating with other local businesses to give visitors curated experiences. For instance, this month, it held its first “wellness weekend,” which featured activities like yoga, wine tasting with local wineries, succulent planting and workshops with wellness coaches. 

Executives at the Hotel Paradox, which underwent a significant renovation last year, said they’re expecting a busier season than last year as post-pandemic travel picks up. Julie Jimenez, the hotel’s director of sales and marketing, said it’s seeing pre-bookings for summer trending up significantly, with double-digit growth over the same time last year. 

As the county’s tourism industry continues to grow, new hotel builds are also on the horizon. The Santa Cruz City Council has given the green light for a new 232-room hotel on Front Street that’s expected to open in 2027; La Bahia Hotel & Spa on Beach Street plans to open next year.

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