The local hospitality industry, already sagging from the collapse of profligate spending during the dot-com boom, was hit as if by a sledgehammer on Sept. 11, 2001. In Monterey County, where the economy depends on agriculture and tourism, the ripple effect of the terrorist attacks was felt immediately and heavily as visitors from the US and abroad simply stayed home. At the Monterey Peninsula Airport, cabbies waited, bored for fares that never came. Clerks at the car rental companies stood idle. You could roll a bowling ball through hotel lobbies and no one would need to hop and dodge.

It’s steadily getting better.

According to the latest information, the anemic post-Sept. 11 days are over, for now. And, in a perverse twist, it appears that fear of overseas travel has pushed many to take domestic trips to places like Monterey instead.

Local economic figures tied to the tourism economy have recovered for the first time since before Sept. 11, according to the Monterey County Convention and Visitors Bureau (MCCVB).

John McMahon is president of the bureau and keeps track of both occupancy rates and tourism revenue here. With the beginning of the New Year, he’s finally got some good news.

“Now we’re back in positive territory,” he says. “Consumer confidence is back or has increased.”

Every year since 2000, McMahon’s visitor numbers have been down. McMahon says that 2004 saw an increase in hotel revenue of more than seven percent, which adds up to some $24 million spent on rooms and another $15 million spent around town.

“After September 11, that’s when we really saw some substantial decreases,” he says. “It actually hit before [that] for us, so when September rolled around, we had a 26 percent decrease. In 2001, we had a decrease in occupancy of 11.2 percent over 2000.”

(Although post-Sept. 11 has seen an increase in cruise ship visits by tour operators reluctant to venture too far from US waters, the bureau does not track spending by those just ashore for the day, or that of other day-trippers.)

Visitors are crucial not only to local shopkeepers, restaurateurs, caddies and tour operators but also to city managers. The City of Monterey, for one, derives a huge slice of its revenue from the hotel tax, known officially as the Transient Occupancy Tax (TOT). In the 2003-04 budget the hotel tax made up $13 million of the city’s $71 million operating budget. Most cities in the area charge a 10 percent tax on hotel rooms, although Seaside takes 12 percent.

The MCCVB has an annual budget of $2 million. Of that, $250,000 comes from dues payments from 600 members. The balance is paid by local cities and the county, which in turn gather hotel tax money in part due to the bureau’s marketing efforts. Total hotel tax receipts countywide were $36 million in 2002-03.

Ag is King; Tourism is Number Two

Agriculture is a $2.3 billion industry in Monterey County and grows 500 million pounds of produce a year, according to the Monterey Peninsula Chamber of Commerce. Right behind all that lettuce is tourism, which rates a $1.8 billion a year industry here and employs 24,000 people, according to the MCCVB. After France and Spain, more tourists come to the United States than anywhere else in the world. And of all the places in the United States visited by tourists, California rates first in visits and spending by visitors.

In order to keep the guests pouring into the area, the MCCVB has launched a new advertising campaign that emphasizes quality of the visit. This follows previous efforts that pushed value, McMahon says. Also the MCCVB has been retooling its online presence so that Web searches will steer potential visitors to area Web sites via choice keywords. Recent features in major newspapers like the New York Times have also kept the area in high profile.

“Certainly we have a healthy economy and we’re out there being pro-active in promoting this as a destination,” McMahon says.

Coupled with anecdotal evidence that visitor increases come from other states, a weak dollar has brought in tourists from around the world to Monterey and the rest of the country.  International tourists traditionally make up about 10 percent of visitors to the area, generally from Canada, Great Britain and Germany. McMahon says the new trends show more visitors to California from Asia.

“Anecdotally we’re seeing that California travel has leveled off, but we’re starting to see more out-of-state travelers and international travelers,’ he says. “What’s great about international guests is they spend more per day and generally stay longer.”

McMahon says another way to bring in more visitors is more passenger-jet arrivals in bigger planes. He’s been in talks with airport officials.

“We’re starting to dialogue on future plans,” he says. “They’ve been receptive but this is very preliminary.”  

McMahon is not the only one showing better numbers. A robust powerhouse in the local economic engine, the Monterey Bay Aquarium saw a surge in attendance in 2004, with 1.9 million visitors—up from 1.6 million in 2003.

Indeed a recently released economic impact study shows that the Aquarium pumps some $250 million into the state economy, of which $170 million stays in the county. In its 20-year history, some 36 million people have stepped into the Aquarium. Of all the visitors, the study found that 95 percent come from outside the county and 30 percent from outside the state.

Ken Peterson, an Aquarium spokesman, says the already high visitors numbers leapt in mid-September with the announcement that a young white shark was on exhibit among giant tuna and barracuda in the million-gallon Outer Bay tank. The usual visitor traffic in September is 100,000 and this year it leapt to 150,000, he says. During a rainy 2004 holiday season, the Aquarium saw one of its busiest days in history, with 12,680 visitors on Dec. 29.

“It’s fair to say that a significant amount of that increase was due to the white shark,” Peterson says. “A lot of the increase was in the last four months of the year.”