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Palm Springs, California tourism: A 5.8 billion dollar business

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May 24, 2014
Palm Springs, California tourism: A 5.8 billion dollar business

Nearly every tourism indicator points to an industry on the upswing. And a recent 2013 report by the Greater Palm Springs Convention and Visitors Bureau confirms the industry as a $5.8 billion economic engine in the valley, which grew 9.4 percent since 2011.

Direct visitor spending in 2013 was $4.5 billion, a 12.5 percent increase from 2011, according to the 2013 Report on the Economic Impact of Tourism, a study conducted by Tourism Economics, an Oxford Economics company that studies the hospitality industry. The CVB did a similar study of the local travel economy in 2011.

Lodging revenue in the Coachella Valley was $984 million, up 17.1 percent from 2011, and food and beverage generated just over $1 billion in revenue, up 10.3 percent from 2011, according to the study.

Tourism leaders also like to point to another noteworthy finding that each household in the valley would need to pay an additional $3,260 annually in taxes to get the same level of services in the absence of state and local taxes generated by tourism. This is up 5.2 percent from 2011.

Local industry leaders as well as hospitality insiders say the growth has been strongest in the leisure travel sectors, particularly around world-class events like the Coachella Valley Music and Arts Festival, the BNP Paribas Open, Modernism Week and the Palm Springs International Film Festival.

Modernism Week in 2013 attracted more than 40,000 visitors to the valley, up from 35,000 in 2012. The 2014 event in February attracted more than 45,000 attendees, generating some $17 million in tourism-related revenue for area hotels, stores and retail shops, the organization reported.

The Palm Springs International Film Festival attracted roughly 135,000 film-lovers to the desert in 2013.

In 2013, more than 180,000 attended the Coachella Valley Music and Arts Festival, with about 45,000 attending Stagecoach: California’s Country Music Festival. The combined 2013 regional economic impact of the events exceeded $254 million, the CVB study concluded.

Events like these and others have attracted a wide domestic and international audience, which in turn builds more media coverage pointed squarely on the Coachella Valley.

The trend, built on increased hotel bed tax collections and record numbers of passengers using Palm Springs International Airport — more than 1.75 million fliers used PSP in 2013, 1.5 percent more than the year before, which was itself a record-breaking year, is a story of the steady growth that can come from an improving economy.

This is a reminder that while leisure travel has returned to its pre-recession levels, group and convention travel business has not. And given the spending trends in the heady days of 2006, that largesse may never return, as corporate culture has shifted toward frugality.

Tourism is driven by many factors — though the health of the overall economy is often the most predictable guide — but the quality of a destination matters, as does its weather. And the weather in the Coachella Valley has been mild while the rest of the nation has shivered through a particularly cold and snowy winter.

That was part of why we saw so many Canadians, Europeans and travelers from the East Coast of the United States this season, said Bruggemans from Le Vallauris.



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