San Diego travel recovery continued in 2022. The January 2023 visitor industry forecast, which includes historical data through October 2022, anticipated that total visits grew 19.7% recovering
to 81% of the 2019 pre-pandemic levels, while total expenditures increased 84.2% from
the prior year reaching $13.7 billion and surpassing 2019 pre-pandemic levels by 18%
The overnight segment led the recovery in 2022 tallying 16.81 million overnight visits that
generated more than $12.6 billion in visitor expenditures. Strongest increase in day
visitation came from a projected 2.8 million visits from Mexico, which almost doubled from
the prior year as Covid-19 restrictions were fully lifted and international travel resumed.
In the hotel sector, room demand recovered to 94% of its 2019 level. The return of hotel
room demand had positive effect on hotel occupancy which increased more than 10ppts
from the prior year and averaged 72.6% in 2022. Revenue per available room (RevPAR)
increased 45.2% in 2022, benefiting from a 23.3% increase in the average daily room
rate (ADR) from the prior year reaching $203.50.
San Diego’s travel sector is expected to show resilience in the face of the approaching
economic downturn as business travel continues to recover and the leisure segment
continues to be supported by remaining built-up savings and pent-up demand.
Nonetheless, staff shortages will continue to increase labor costs for the industry which
will have to be, at least partially, passed on to consumers, and additional costs for travel
will feed through from higher energy and jet fuel prices. Our San Diego visitor forecast
(as of January 2023) has 2023 improving to 31.8 million visitors from 28.5 million in 2022
– still 9% shy of the 35.1 million visitors recorded in 2019. Both overnight (+10.9%) and
day visitors (+12.5%) are expected to continue to make gains in 2023. Full recovery in
overnight visitation is expected in 2023, while day visitation will trail the recovery – day
visitation is expected to remain weakened through 2025. Nonetheless, expenditures will
return to a more stable growth trend over the next few years and grow at an average
annual rate of ~5%.
As we enter 2023, it is clear that the economic tide has turned, and our macroeconomic
forecasts expect a relatively mild global recession next year. Under normal
circumstances, travel volumes would be negatively affected by even a mild recession,
especially with the downturn across a range of advanced economies. However, we
believe that the tide is still coming in for travel: growth will be slower than in 2022, but
recovery will continue. There would appear to be plenty pent-up demand for travel in the
United States, as the Travel Sentiment Wave 67 in December 2022 by Longwoods
International & Miles Partnership reported that more than 9 out of 10 respondents are
going to travel in the next six months.
Click here to download the complete forecast from Tourism Economics.
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