According to a report released Thursday by the Los Angeles Tourism and Convention Board, visitor spending reached 89% of 2019 levels and visitor volumes registered 91% of pre-pandemic levels.
That growth translated to $34.5 billion in overall economic impact to L.A., a figure that accounts for how visitor spending affects job growth and state and local tax revenue, among other factors. About one in every 29 jobs in L.A. is supported either directly or indirectly by tourism, according to the report.
While the L.A. travel industry’s recovery has continued to pick up significant momentum in the last year, some hurdles remain. Inflation and a potential recession loom large, international visitors have been slower to return to the city and labor shortages persist in some sectors of the industry.
High global inflation rates have translated into reduced purchasing power for travelers. Direct travel spending in California totaled $134.4 billion in 2022, only 7.2% below pre-pandemic levels in 2019. But factoring in inflation, the true quantity of goods and services purchased by travelers still lags 2019 levels by 20.8%, according to a separate travel economic impact report by the nonprofit tourism agency Visit California.
“Inflation is something that we all are watching [to see] what happens with the overall economy. And those recessionary headwinds that we all are reading about…” said Caroline Beteta, the president and chief executive of Visit California. “But today, travel is very, very strong.”
At the same time, travel from abroad has been slower to pick up. Despite significant growth in international visits from the previous year, especially from Mexico, the segment remains at just 9% of total visits in 2022 compared to 15% in 2019.
“International is by far the most lucrative customer segment. The sooner we get international back online, the sooner we’ll get more Angelenos back to work,” said Adam Burke, president and chief executive of the tourism board. “It takes between two and a half and three domestic travelers to equal the spend of just one international traveler. That’s why this is so critical.”
Continued challenges have plagued international travel recovery, especially between China and the U.S. due to ongoing geopolitical tensions and COVID entry and exit protocols. Before the pandemic, the L.A. tourism board estimates 1.2 million visitors arrived from China in 2019. In 2022, that number was 110,000.
“There’s a huge pent-up demand, I believe. And there’s just not enough capacity to be able to bring the people back and forth anymore due to the geopolitical restrictions,” said Justin Erbacci, chief executive of Los Angeles World Airports. Visa wait times have also been an additional barrier, Burke noted.
Labor shortages in the airline and food and beverage industries are still affecting the recovery as well. Employment directly supported by visitor activity rose 20% in 2022, rebounding to 171,107 jobs, but remains 38,000 below pre-pandemic levels.
Airlines continue to struggle with shortfalls in aircraft, pilots and ground crew, said Erbacci. Last year, Los Angeles International Airport canceled dozens of flights during the holidays due to crew shortages. While travel demand is up, airlines such as United and Southwest have had to ground planes and delay flights due to pilot shortages.
Still, the city is well-positioned for continued recovery, said Burke, as it has evolved as a tourist destination since the pandemic. It boasts new attractions, such as the Academy Museum that opened in 2021 and the Super Nintendo World that opened at Universal Studios this year. Professional sports teams, including the Angel City Football Club that began play in 2022, also beckon visitors. The coming years will bring more international sporting events, such as the World Cup in 2026 and the Summer Olympics scheduled for 2028. LAX is also undergoing a $15-billion modernization makeover.
“We’re never going to be short of tourists here in California,” said Jan Brueckner, an economics professor at UC Irvine who specializes in transportation studies.
Plus, the pandemic helped boost one particular kind of tourist: the “bleisure” traveler, referring to flexible remote workers who come to L.A. for business and add on extra days to their trips for leisure.
“They may go someplace, they may work remotely on Friday, and then they might be with their family and then they do tourist stuff over the weekend, and then go home,” Brueckner said. “Evidently, those kinds of trips are bigger than they used to be.”