The Coronavirus’ Economic Impact on San Diego, by the Numbers - Voice of San Diego

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The Coronavirus’ Economic Impact on San Diego, by the Numbers

San Diego County is coping with life under the coronavirus, we’re looking for evidence of how the virus is affecting the region’s economy and governments.

Customers at Costco Mission Valley line up to get in. / Photo by Megan Wood

This post was last updated at 4:42 p.m. on March 13.

San Diego County is coping with life under the coronavirus, we’re looking for evidence of how the virus is affecting the region’s economy and governments.

The biggest steps being taken to delay the spread of the virus began only a few days ago, and the San Diego Unified School District won’t close its schools until Monday.

We’re looking to collect information from as many public data sets as possible, to see if any of them have or will indicate behavioral changes taking place that could impact local budgets and public services, or that could be red flags for economic problems.

We’ll update these numbers as newer information comes in.

Convention Center Loses 97,000 Attendees

The Convention Center has taken an early hit over the virus. A handful of conventions announced cancellations earlier this week, and more are doing the same as the situation has worsened.

Thirteen conventions have now canceled their events through May. Collectively, that amounts to 97,100 attendees and more than 104,000 hotel room nights.

Altogether, the San Diego Convention Center Corporation expects that to amount to more than $115 million in lost spending and a lost regional economic impact estimated at more than $196 million, said corporation spokeswoman Maren Dougherty. The corporation pegged the lost tax revenue from those cancellations at $3.7 million.

Hotel Occupancy Falls Nearly 10 Percent

But conventions aren’t the only reason people travel to San Diego. We asked the Tourism Authority what hotel occupancy looked like in general, to get a broader sense of how the tourism industry is handling a virus that’s caused many Americans to cancel their travel.

During the week that ended on Sunday, March 7, San Diego County hotels were 70.4 percent occupied, down about 10 percent from the same week a year ago.

The city’s average occupancy since 2016 has bounced around between 77 percent and 79 percent, and was forecast for 77.2 percent in 2020, according to the city’s comprehensive annual financial report.

The largest declines were downtown, where the 69.7 percent occupancy was down more than 17 percent from a year ago, and in Mission Bay, where the 61 percent occupancy was down more than 18 percent. There was no part of the county with an increase in hotel occupancy from last year.

But San Diego’s decline was not as bad as some other markets experienced.

San Francisco led the way, with a 44.5 percent decline in occupancy. Anaheim, Seattle and New Orleans each had declines over 25 percent as well. San Diego was in the middle of the pack, with a similar experience as Houston, Minneapolis and Miami.

For many, the severity of the coronavirus outbreak didn’t set in until this week. This same set of numbers for this week, available sometime next week, could be telling.

How Hotels Affect City Services

The tourism industry isn’t just a major piece of San Diego’s economy. It also plays a big part in the city of San Diego’s budget.

Last year, 8 percent of the city’s general fund – the bucket of money from which it pays for basic city services that aren’t funded by a dedicated revenue source – came from “transient occupancy taxes.” That is, hotel taxes.

That $131 million was expected to increase to $136 million this year, according to the city’s comprehensive annual financial report. But that revenue increase included an expectation of a slight decrease in occupancy, accompanied by higher average daily rates for the available rooms.

Last week, the average daily room rate dipped 1.4 percent.

Air Traffic Holds Steady So Far

We cannot yet discern any difference in the number of flights leaving the San Diego International Airport.

During the week that ended March 2, 1,917 flights departed from the airport. During the week that ended March 9, 1,924 flights took off. Arrivals told the same story.

The San Diego County Regional Airport Authority typically reports its air traffic reports on a monthly basis. The agency pulled these weekly numbers together by referencing data from its noise division.

Jonathan Heller, an Airport Authority spokesman, said a decrease in flights would mostly affect the agency’s budget through its non-airline revenues: fewer flights means fewer flyers, which means fewer people buying food or drinks in the terminals.

Border Sales Down 35 to 40 Percent

Customs and Border Protection has so far declined to provide data on the number of daily border crossings at the San Ysidro Port of Entry.

San Ysidro Chamber of Commerce CEO Jason Wells, however, said retail sales in the area around the Port of Entry were down nearly 40 percent this week.

The chamber cautioned, though, that a week of rain contributed to those numbers as well.

Public Transit Ridership

MTS likewise publishes its ridership statistics on a monthly basis. The latest available data on its website is from January, but MTS Spokesman Rob Schupp said the agency will begin to pull data on a quicker turnaround. Data from the past week would also be impacted by the rain.

But a severe decline in ridership could present MTS with some tough decisions.

In the 2020 fiscal year, nearly 32 percent of the system’s $305 million budget came from fare revenue. That anticipated a 5.4 percent increase from the previous year.

If coronavirus-related behavioral changes led to a steep decline in ridership, the agency might be forced to curtail service, Schupp said.

Sales Taxes Probably Don’t Tell Us Anything Yet

The San Diego Association of Governments gets .5 percent tax from the sale of most retail goods in San Diego County, which it uses to build regional transportation projects. Likewise, roughly 19 percent of the city’s general fund comes from sales tax revenue.

But it’ll be a while until we can say how the coronavirus has affected either of those numbers.

For one, the state collects tax revenue and distributes it to local and regional governments on a monthly basis. SANDAG won’t get its next disbursement until March 20, but that will be based on last year’s collections.

For another thing, a surge in retail spending as people prepared to be isolated at home due to the coronavirus has, if anything, increased sales tax collections thus far. It would take months to see any net impact from people spending less time at bars, restaurants and general shopping.

Maya Srikrishnan contributed to this post.

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