Assembly Standing Committee on Arts, Entertainment, Sports, and Tourism

All right. Good morning everybody. We are going to get started with our informational hearing today for the Assembly Committee on Arts, Entertainment, Sports and Tourism. I certainly invite all Members of the Committee to room 444 this morning. We are of course, Wednesday, August 20th. I want to thank you all for being here today.

This is a very important topic given some of the times that we're in right now.

We know that since the beginning of the year we've seen a lot of policies and actions implemented by the Federal Government which have had a chilling effect on visitor serving industries and businesses here in California, both at the individual level, a small business level, a community level, and certainly statewide across the sector are seeing downward and sometimes significantly downward impacts right now.

And it's important that we take a moment, a snapshot in time to really have this hearing and really lay out what is going on right now, what we predict or fear might be coming for the industry in the near future and what we can do as Californians to be able to act on that knowledge and help safeguard these jobs and these businesses.

We of course, also in California experienced in the last two years a record back to back record visitor spending. We celebrated a return to normalcy coming out of the pandemic from just a few years ago.

But this recent downturn that we're experiencing this year is more concerning when we look ahead to a lot of the upcoming internationally significant events that cities in California are going to be hosting over the next three years. We have planning more well underway for those events.

Industry businesses like hotels, restaurants and airports are gearing up for managing the influx of travelers. It is not the best time for visitors or these businesses to have any uncertainty, especially when it comes to their safety.

Now this is on top of a lot of other visitors serving accommodations here that we are proud to showcase here in California and welcome both domestic and international travel to the Golden State. As we have seen those downturns, we are feeling the economic slump as well.

So we are equal to learn from our panelists here this morning who represent various California destinations and organizations about what they are seeing as far as numbers of projections of visitors both domestically and from other countries.

We would also hope to hear feedback about some of the effects of the recent changes in the tourism industry due to both state and federal policies and what the adaptations are being made to message and promote that are currently underway.

We are very grateful for the expertise of excellent panelists that are going to be offering some of this testimony and their perspectives and really the information and dialogue that's going to come from this morning's information hearing, we are going to have our panels testify. I'll do them in groups. We have two panels here today as well.

And then at the conclusion of that, each of those two panels will have an opportunity for open discussion amongst Committee Members with any questions they may have. And at the conclusion of both of our panels, of course, we always Reserve time for public comment.

And I'll instruct anybody that's here that wants to give testimony as well towards the end of the hearing how to do that. But we hope that that will provide additional tourism related organizations and entities to provide some of their own unique perspectives and input.

With that, I'd like to move on to our first panel, which is a panel of one. A very important high level overview. But we're grateful for the help of the CEO of Visit California. I'd like to welcome Caroline Beteta to the presentation table. Don't be intimidated. I know you're on your own there, but this is a very.

You're in friendly company here. And when you're ready and comfortable, you can begin your presentation. We're looking forward to your testimony.

Thank you, Chairman Ward. What a delightful day here in the Legislature. We really, really appreciate your spotlight on tourism, the importance it has and it's, you know, it's an elusive industry and I know that's why you're leaning into this, but always fragile, just like any other retail product.

So great panelists today and really appreciate the support of the Legislature. So with that, I'll just start a little bit about mission and background and actually Visit California operates with a mission to develop global programs that inspire travel to and within California.

And as I said, I appreciate the opportunity to represent thousands and thousands of businesses throughout all of California that power the state's travel and tourism economy. A little bit on our background first and really how tourism has recovered since the pandemic and current trends.

I'd like to start with just a little bit about who we are that's up on the slide there. Visit California is a nonprofit and it works in close coordination with the Governor's Office of Business and Economic Development.

For the past 30 years, the organization has been funded by a self imposed assessment on businesses that benefit from tourism directly. The model was a first of its kind in the nation, actually.

And fashioned after California's agricultural commodity boards, the assessment model has created a reliable source of funding for statewide tourism marketing that maintains California status as a top global destination, number one destination in America.

As a matter of fact, the good news for you and your constituents is that it's an industry funded program that does not rely on California taxpayers. Visit California's global program of work is guided by an industry led board of directors, 37 in total. That represents all the tourism segments and all 12 tourism regions in California.

Visit California's marketing program is focused on consumers in the other 49 states and visitors from 13 key international markets. The travel and tourism sector is a cornerstone of California's economy. Visitor spending fuels job creation, business growth and vital state and local services across every region of California.

In 2024, visitors spent $157 billion here in California, generating $12.6 billion in state and local tax revenue and supporting 1.2 million jobs for California workers. While visitor spending in California's tourism industry has seen modest recovery since the pandemic, it has not kept pace with inflation. As you can see on the slide, spending was 10.5% below 2019 numbers.

When adjusted for inflation. Full recovery from the pandemic remains elusive. The good news is that California remains the number one tourism economy in the United States as measured by share of total visitor spending. They say everything is bigger in Texas, but not tourism. California's tourism is 70% bigger than Texas. I'm picturing a slide.

It should be animated and come up and cover all of Texas anyway. We're bigger than the Big Apple New York California's visitor spending is one and a half times the size of the entire State of New York, and we're maintaining a lead over our closest competitor, Florida.

During the pandemic, California lost share to Florida as our state took steps to limit travel to slow the spread of COVID While the decline may not look like much, every 1% of share represents $12.8 billion in spending at local businesses. Since travel reopened in 2021.

Visit California's marketing response has been highly targeted to ensure recovery of our market share. We've seen steady year over year growth in the year since market share data is only available through 2023. So let's take a look at some other indicators to examine how California's tourism industry is performing in today's environment.

Just a few months ago in May, tourism economics downgraded our forecast for 2025. It's the only time other than the pandemic that we forecasted a year over year decline in visitation. Domestic visitation will remain essentially flat, but a 9.2% drop in our international visitation is tipping the overall forecast into negative territory.

This decline is driven by economic pressures, shift in sentiment abroad, and concern about the ease of travel into the U.S. headlines about border detainments and immigration enforcement have heightened concerns among international travelers and exacerbated long standing issues such as lengthy visa wait times.

US Consumer confidence has steadied since May, but it remains down year over year, reflecting concerns about inflation, trade wars and the threat of a major recession. Leisure travel is a discretionary expense and what's in people's wallets is the biggest factor in determining on where and how people choose to travel.

Across all of California's priority international markets, 42% of travelers cite cost as the top reason for staying home. Just 13% say they plan to visit the United States, down from 18% last year.

Through the first half of this year, we've outperformed that forecast, although international arrivals are still down 4% overall, this is led by a 13.8% drop in Canada air arrivals. Canada's declining visitation is not unique to California. A combination of 51st state rhetoric and the strong US dollar are negatively influencing Canadian visitors across the country.

The surprising bright spot has been Mexico, with air arrivals up more than 6%. Despite this international softness, there is still a desire for California as a travel destination regarding room demand. This outpaces our top domestic competition through June with an increase of 2.1%. This metric is actual hotel rooms sold.

It's independent of inflation, price, room supply and any other caveats. So a bit of good news there from a competitive perspective and it accounts for both domestic and international visitation to ensure California remains the number one travel destination in the country. Visit California works within a tourism ecosystem that funnels consumers to thousands of California businesses.

Our collaboration with Brand USA maximizes our visibility on the global stage. Visit California's role is to inspire consumers at the top of the decision making process and filters consumers down to the golden triangle, the regional destination and partner level to place, plan and travel ultimately and book an experience.

Destinations drive visitation and ultimately tourism businesses deliver on the experience that will keep our visitors coming back for return trips. Even as the global environment shifts, California's brand remains our greatest asset.

In this highly competitive environment, Visit California works to protect that brand and its critical and strong lodging numbers through the first half of 2025 is proof of the enduring appeal of these marketing programs as the ultimate playground. Our brand Platform California offers travelers something that feels removed from the noise and escape, grounded in joy, discovery and connection.

Visit California will execute a $55 million global media plan this fiscal year projected to deliver 2.8 billion impressions. A layered marketing approach is deployed with three integrated brand campaigns designed to maximize each research confirms this layered strategy significantly amplifies results. When a single campaign layer can increase visitation and spending by just 6%.

Consumers that can recall multiple layers from campaign initiatives that impact can rise to 42%. So let's take a look at these three core campaigns that are on the air around the world. The first one is called Let's Play as Part of our Global Brand, Platform and Advertising.

That that spot showcases the entire appeal of California as the ultimate playground. The creative is backed by a $24 million media buy, generated an estimated 1.35 billion impressions, and is distributed in both the US as well as Australia, Canada, Mexico, China, and the UK. So if we can, let's roll that first video.

There it is. You can.

[Advertisement Playing]

Makes you want to leave the room, get out there and play, right? Okay, so family travel is California's number one core audience segment, accounting for 82% of our domestic return on investment. Families stay longer and spend more on activities, and you can imagine the competitive environment in this space with places like Hawaii, Florida, Arizona, etc., highly competitive environment.

Childhood rules anchors the family-oriented campaign that speaks to the "high spending millennials with kids" audience. So, let's take a look at our family.

[Advertisement Playing]

Okay, and number three, finally in this triad, our road trips focus campaign just launched in March with a new creative asset up around the bend. Let's take a look at that final asset.

[Advertisement Playing]

A little off on the track, but you get, you understand it. You understand the compelling nature of the message. Anyway, in addition to a domestic marketing program, Visit California has a presence in 13 markets around the world, which account for 84% of all international inbound travel to the state.

Visit California's focus across all market initiatives is to reach valuable global travelers and inspire them to choose California for their next trip. This is core to Visit California's guiding principle of doing what the industry can't do for itself.

International visitors spent $26.2 billion in 2024 and remain important to the vitality of California's tourism economy, especially in our gateway cities. These travelers typically stay longer and spend more. They travel midweek and off season. Last year, they were just 6% of traveler volume in California, but they were 17% of spending.

However, 83% of travel spending in the state comes from U.S. travelers, including Californians. In 2024, Americans spent $102 billion during trips to California. Californians took 118 million trips in leisure trips that generated $29 billion.

In the FY 2025-'26 budget that the board just recently passed, we increased investment in domestic marketing to 87% of our annual funding, up from 79% in 2024-2025. This reallocation of funds from international domestic is a recalibration as challenging global conditions continue to evolve. Travel experiences are the number—the state's number two export.

When foreign visitors spend money in the state, these transactions are counted as service exports, according to the U.S. Department of Labor. When you think of California's global exports, top of mind is rich agricultural offerings, products like almonds, citrus, and cheese, but even these iconic exports fall short of the economic impact delivered by international tourism.

Just to put it in perspective, you'll note on the slide that it takes 2,000 pounds of premium citrus to match the economic impact of just one visitor from Canada. Matching the economic impact from one visitor from China requires a sale of 40—545—pounds of California cheese, nearly a quarter ton of product.

One air traveler from Mexico generates as much economic value for California as exporting 732 pounds of almonds. While agriculture feeds the world, tourism fuels California's economy in waves that rival and surpass top produced commodities. I'd like to talk a little bit now about live events.

Through a pure media lens, leveraging live events as a media platform can cut through a crowded and fragmented environment and create culturally resonant moments. As host to several upcoming mega events like the FIFA World Cup and LA 2028 Olympics, California enjoys advantages over other states and our tourism competitors.

The reach of the Olympics can't be overstated. If the 2028 Games mirror the 2024 Games in Paris, LA 2028 will reach over 5 billion global viewers. The Paris Games saw a record breaking 23.5 billion streamed minutes across NBCUniversal Media from 7,000 hours of coverage. This is more than a sporting event.

It's a moment to showcase California to the world as a place of inclusion and excellence. The lasting benefits of hosting the Olympics and other mega events is the legacy created by showcasing the state on a global stage.

As Paris experienced, hosting the Olympics can lead to travel displacement in which visitation and spending declines in some locations and market segments. Visit California role in mega events like the Olympics is to leverage global coverage and and audiences to market the entire state.

Visit California is focused on three main objectives: proactively communicating with travelers and business about what to expect and how to navigate the region during the Games, leveraging the Games to increase demand across all of California's 12 tourism regions throughout 2020 and beyond, and positioning California as a top global destination during the Olympic spotlight and sustaining that momentum in the years after. In closing, tourism has and continues to power California's economy.

Yet after several years of steady recovery, California is facing the first decline in visitation since the Pandemic. Making matters worse, inflationary economic conditions and inflammatory political rhetoric are negatively influencing visitor travel plans. Much of California's travel and tourism industry is hurting. Yet through it all, the California brand remains strong.

The challenges are real, but Visit California is advancing with clarity, strategy, and a deep commitment to our industry's future. We are working with our partners at both national and the local level to continue to inspire travelers near and far to plan their next trip to California.

Thank you, Chairman Ward, Members of the Committee, and I look forward to taking any questions.

Well, thank you, Ms. Patena. Seeing those very well produced videos certainly was the bright spot of the day. So congratulations on that. It just warms our hearts to be able to see the visuals of what makes us proud of California and to have it all encapsulated there in a couple of short videos.

And I just wish I had had this hearing before summer recess because it may have inspired me to sort of thread few other things, although I did stay in California for four weeks and got to see some of those, and I appreciated the Rady Shell from San Diego being highlighted there as well.

Want to welcome our Vice Chair, Assemblymember Lackey. I didn't know if you had any questions that you wanted to start off with. I certainly have a few that I could ask too.

No, I have no questions. I just—it's refreshing. I just left another Committee that's not so refreshing. But I want you to know that I'm proud to be a Californian and I am not leaving. Very, very thankful for the good things that the state affords us.

And that presentation reminded me of how fortunate we are to be in this state. And I think, oftentimes, tourism is underestimated of its influence and its importance to this state, and I'm proud that you're able to promote that and I look forward to seeing its results.

Thank you, Assemblymember. We really appreciate the commitment.

So, back to some of your slides on the visitation—the, the, the anticipated downward turn in visitation. I think you had 9.2% of international projected right now for 2025. And of course, we'll see how the numbers at the end of summer and, and, and for the rest of the year and maybe in the holiday season as well, you know, might, might, might change that.

But how has any of this translated into your economic impact or your jobs impact numbers as well?

Yeah, I mean, they go hand in hand. They're completely threaded visitors. The visitation numbers, you know, give us an accurate count of spending and when spending goes down, obviously there's a softness in the tourism economy and so that affects the jobs as well. So, our, our research person in house has calibrated that.

I'll have to get back to the Committee. I'm not clear on the exact number, but she has like a fixed for every drop in incremental spending that will obviously affect tax revenue in the form of mostly local transit occupancy tax, sales tax revenue, of course, but then jobs as well.

And in your background or that we have for the Committee record, you are hoping and predicting in 2026 a return slight trend up as well. What is the kind of basis of some of that projection?

Are you hopeful that, you know, your aggressive work on marketing and strategies here to distinguish and promote California specifically might help to rebound the industry?

Absolutely, we—there's, I mean, two issues there. One, like any economic cycle, things are cyclical, both domestically and internationally. But in terms of our impact on the program, we actually measure the return on investment and the incremental lift that we had.

Last year, we measured about $31 billion that could be derived through all of our focus group analytics of pushing, you know, that economic infusion into this economy. I also think it's important to note for me personally, yes, year over year is important when I'm testifying before important people like yourself.

But I look at it from a marketer's perspective and that's the long-term brand building you get. California is like any other retail product. And so, when you're investing in that brand, through managing that brand, promoting that brand, you also get this long-term lift and you're better able to fight off brand tarnish.

Got it. The, I—sorry, lost a little train of thought there.

Did I confuse you?

No, no, you didn't confuse me. What, separate from, you know, the effects of what you said you had mentioned about a lot of political discourse and rhetoric and, you know, international opinion and other factors, what, prior to maybe 2025, was there anything else on the horizon that—you mentioned cost.

That, of course, people have to decide for leisure purposes if that is something they're going to be able to afford.

Are there other things that sort of led up to a more challenging year right now that are getting intertwined with federal actions or political rhetoric as well? In other words, how do I separate these issues and what are things that we can work on to help to correct that trajectory?

Yeah. So, first and foremost, it's the strength of the dollar, particularly with international visitation. Our dollar is so strong it is a huge encumbrance for travel, I mean, first and foremost. But then you layer on two additional factors right now. One, you know, immigration and customs and accessibility for international travelers. There's—and then, and then finally, sentiment I'll get to.

But on that international travel facilitation right now, in the Administration's Bill that they passed, Big Beautiful Bill, I guess they call it, there was language in there that talked about a visa integrity fee.

$250, right?

Yes, exactly. And so, what that does, if implemented, would make California, or, sorry, the United States, shifting hats, the most expensive nation to travel to. If you're a family of four, it could be upwards of $1,500 before you even step foot into the country.

I mean, that's just not only a huge monetary barrier, but also sends a message and leads into sentiment. Are we really rolling out the welcome mat for these visitors that prop up our economies, not only in California but all over the United States?

Yeah. Are you seeing any distinctions between—you showed the numbers about our level of activity compared to Florida, Texas, and New York specifically, and I know that those are big tourism markets as well, but for other counterparts across the state, the United States, are you seeing California distinguish itself in any ways?

Are we faring better, worse, relative to our baseline, or are we pretty much, you know, experiencing something on par with the rest of the country?

Sometimes I like to say in informal vernacular, we're the winner of the ugly contest. Our brand is very strong. It stands separate in part of being a very welcome and inclusive culture. And that, that does help us in these challenging environments with perhaps like our border states, Mexico and Canada.

I mean, the fact that we're further removed from the border of Canada, where, say, the Northeast corridor, there's a big drive market, they're heavily impacted by this Canadian issue. We have a lot of familiarity and a lot of exchange with Mexico, so I think that's a lift for us.

So, in short answer to your question, we do have a bit of glow effect, but it's not enough to sustain us from the overall, you know, challenges we have.

One thing I didn't mention that has been an issue for a long, long time, spanning a decade or more, is the visa wait times that international visitors, you know, endure just to visit California.

Yeah, right. And there's no hur—we can't get over that hurdle. We are going to have to encourage an improvement for that as well, because there's nothing that we can do about, you know, those necessary safeguards and processes for those entering our country.

I'm reminded about representing San Diego and at the time on City Council during the First Trump Administration, you know, we were deeply concerned about the very strong, and you remember early in that term, direct rhetoric that was being placed on the country of Mexico. For San Diego and our region, we are intertwined necessarily.

We are a binational economy in some ways. And so, that was important for our Chamber to be able to directly engage with Mexican officials at the federal level there, just to assure in that very first year, like, hey, where can we sort of—do you understand we have separate identity here?

We are San Diego, we are California, that's D.C. and they—we were reassured that, yes, there was some distinction there. I was interested to see that Mexico travel was actually up. That surprised me. Is that business or leisure? A little bit of both.

It's both. And to be honest with you, it surprised us too. And it's fantastic. And the only thing I can speak to on that is that there is a lot of entwinement economically with leisure travel, visiting friends and family, and this huge economic tie, you know, being California being the largest State of, you know, Mexican expatriates, patriots.

There's that synergy just to what you talked about is endemic statewide. So, I think that, that helps us. The familiarity of inbound Mexican travelers helps.

Thank you. And then my last question, you know, kind of looking ahead on the near term horizon right now, specifically to the international events that are coming up with the World Cup and the Olympic Paralympic Games, but maybe even beyond 2020, we got to start planning for opportunities to showcase and provide destination interest for California.

What do you see as some other opportunity areas that we can start thinking about, maybe next budget year as well, as we're thinking about how to invest in California that would set us up for success?

Yeah, absolutely. And I think the answer is in your question. You talked about really leaning into planning and investment. So, that partnership, I go back to California, where I sit, and my responsibilities is a retail product.

And so, we have to manage that like you would Coca Cola or Apple computers or the brand of pistachios, going back to agriculture. So, working with you on that front, you will hear from some of our other panelists how important those live events are to California's economy, whether they're large or small.

It's a business proposition and there's risk and investment, but there's huge opportunities for California all over the state for us to be much more aggressive, like our competitors set, to get these big events into these communities where hotels are full, restaurant, retail, you know, all, all the elements of what makes the tourism economy so great for communities.

I mean, I'll leave it with this. In every rural region of California, it's the number one or two industry they are so dependent on the tourism economy. If you think about it through history, with the waning of extractive industries and now this infusion of visitor spending, that's what props up main streets across California.

So, these events is what keeps those communities thriving. Locals love the benefit of it, but it's the infusion of visitor spending, even in gateway cities, too. I'm looking at you, of course. Of course. You know, so gateway is so important to, you know, the downtown district of San Diego, for example.

Absolutely. Well, Ms. Patena, thank you. And unless—are there any subsequent questions, I guess, that came to mind?

No, just a concern that I have. Being a former Highway Patrolman, I will tell you that traffic and the free flow of people being able to get from one destination to another, a lot of countries take pride in their public transportation. Our country has a ways to go.

I will tell you that I think that's one of the areas that we should focus on. And people feeling safe to be on public transportation and feeling comfortable is something we should actually work on, on this, in this consideration especially. I don't know how in the world they're going to manage traffic in the Olympics. I really don't.

I pray for some kind of miracle, but it's going to be an issue. And I think transportation often gets undervalued. And I hope that we can work on that.

I really appreciate your comment. I'm the Vice Chair of the U.S. travel Association, our National Trade Association. And it is the number one priority for US travel is infrastructure, both air and highways. They do an annual conference every year to try to get a spotlight on how important it is for visitors and locals alike.

Every year, we have a great, what we term a snow summit, here in California with the head of Caltrans, the district directors, and our Alpine communities, to make sure we're looking at those safe conditions and clearance and accessibility. As well as a couple weeks ago, I was with Secretary Omeshocken to tour the closures of Highway 1.

You're right. When we shut down these highways, we shut down communities, lives. Yeah, it's terrible. And of course, an infusion of tax revenues because we can't get people there. So, thank you for putting that on the record.

Thank you, Mr. Vice Chair, and thank you very much for your testimony this morning. A great way to help us provide that broad overview. So, next, we will convene the second panel. We have four members that we're excited for their presentations. I'd like to welcome up Mike Testa, who is the President and CEO of Visit Sacramento.

Lauren Salisbury, the Vice President of communications with Santa Monica Travel and Tourism. Rhonda Salisbury, the Chief Executive Officer of Yosemite Sierra Visitors Bureau, maybe any relation. And then I'm so glad she was able to come because she's an old—dear, old friend—and neighbor and someone we've been working with closely together in the San Diego community.

Carrie Verbecky Kapich, the Chief Operating Officer of the San Diego Tourism Authority. So, when you're ready, you can begin your presentation, and we're looking forward to your remarks.

Great. Thank you, Chairman Ward. Thanks for having us this morning.

So.

Do I need to move?

No, no, I can see. Thank you. One of the things I want to talk about is a destination like Sacramento. Different than some of the other cities in California. We don't have a Golden Gate Bridge. We don't have an ocean.

And so, a lot of things that we create from a tourism standpoint are designed to create that tourism demand for Sacramento. We've done that through a series of special events. You know, pre-Pandemic, Sacramento's, excuse me, largest driver of tourism was conventions. Obviously, during the Pandemic, conventions weren't convening.

And so, one of the pivots that we did was try to diversify our visitation portfolio. We did that through sporting events, we did that through music festivals. We did that through culinary tourism.

So, coming out of the Pandemic, we're stronger in the sense that we have now five different streams of tourism visitation coming to Sacramento, rather than just relying on one. When you live and die by conventions, you live and die by conventions. And so, we're much better economically for what we've done.

So, I wanted to talk to you about some of the events that we've done because I think they're very important, not only for cities as Sacramento, but cities across California.

You think of some of the big events, whether it's Bottle Rock or Outside Lands or Coachella, up and down the State of California, there are big music festivals driving for those destinations, creating economic impact and driving employment. So, I thought it was important to do that. I want to talk about Aftershock first.

Aftershock is one of the largest hard rock festivals in the United States, probably in the top three. It generates 160,000 people over four days. More than 50% of those attendees don't reside in Sacramento. And even California, it brings people from every state in the U.S. and 32 countries.

That's something that has been a game changer for an event that started as a one day festival with 11,700 people to now a four day event with 160,000 people. It's a big deal. You know, the question of people coming from outside the U.S., specifically from Mexico and other countries.

We typically get about 140 attendees from Mexico coming to Aftershock. I don't know what those numbers are this year, but I'm going to talk about an event in a few minutes that we're hosting called Terra Madre that is also an international drum. We have heard some anecdotal information from people coming on the outside.

The last and most important part there is probably it's about $40 million of economic impact that this brings to Sacramento, to our airport, to our rental car companies, and everybody in between. So, Golden Sky is a country music festival that we hold the weekend after Aftershock. We leave the staging up; we lead the infrastructure up.

We just changed the signage from heavy metal to country music. It went—it had a three year run. About 75,000 people would attend that event. Big driver of hotel rooms, over $13 million in economic impact. That event struggled. You know, if you went to it, you thought it was packed.

But music festivals are not for the faint of heart. I always tell folks if they were easy, everybody would do them. It looks like you're making a lot of money, but when you're spending $10 million just to bring in the talent, it's not an easy endeavor. Go ahead to the next one. That's me. Ironman California.

Sacramento hosts the largest Ironman in North America, and we've branded it Ironman California to be a part of the state. This is an event that brings in people from all over the world. They're not as concerned about the price of hotel rooms. They're riding $11,000 bikes and training year round to be in an event.

They come to our city a few days early, they stay a few days after. They bring a lot of witnesses with them to prove that they've done an Ironman. So, from an economic standpoint, it's a big driver of tourism to our city.

You know the events that I'm talking about, Golden Sky, Aftershock, Ironman, they all happen in October, so we have three consecutive weekends that are bringing over $50 million of economic impact to Sacramento. Terra Madre Americas. This is the largest food conference held in Europe. It's been there for 20 years. Brings in 300,000 people from 120 different countries.

It's never been in the US and the first time it'll be in the US is this September. We will host it in the odd years. Italy will host it in the even years. This is a huge coup not only for Sacramento, but for the State of California.

This is an event that, you know, as you can see in Italy, it brings in people from 120 different countries. What we are hearing from the Americas part of this, folks in Mexico, Bolivia, Ecuador, even Brazil, have said we're not coming this year.

We're concerned about coming to the US at a time when immigration is being looked at in a different way. You know, we signed a 10-year deal with Slow Food International, so we'll host this event for the next 10 years. And many of them have said to us, we hope to see you in 2027.

So, we're definitely feeling that from an international standpoint of folks coming for this event, that there are—there is some concern and there is a little bit of apprehension to come for that. Okay, I lost my slide here. So, the other—there we go.

The other festivals that are on there, there's Soul Bloom, which is a music festival in Sacramento. We'll just do it this way. Soul Bloom is a music festival in Sacramento that's an R&B genre, brings in about 20,000 people. A lot of folks from outside the area.

Holo Holo is an island and reggae music festival held at Cal Expo that brings in people. I talk to you about these festivals because coming out of the Pandemic in 2023, while most California destinations were down about 28%, Sacramento was up 80%. And I could point to those music festivals and different events that were bringing people to our city.

That was a huge game changer for Sacramento. Now, we look at the festivals that have struggled. Soul Bloom is no longer happening in Sacramento. Golden Sky is no longer happening in Sacramento. And part of the reason for that is that they're very expensive and they're very risky financially.

Our partner, Danny Wimmer Presents, is the largest independent festival producer in the United States. He does two major festivals in Louisville. And one of the things that the State of Kentucky has done has helped him by giving him back some of the tax revenues that he's generating.

You know, with the City of Sacramento, when we were looking at the, the country music festival, I was able to show them the data that said Aftershock is driving $1.6 million in hotel taxes to the city of Sacramento, help us with some of that money to bring a second music festival here. The city invested in that. Golden Sky was a great festival for three years.

We're hoping to bring it back next year. But I say this to this Committee because, you know, I think the state has been very good about prioritizing filming in California, and rightly so.

But I think we also need to look at some of the music festivals and some of the challenges of putting those things on, the jobs they're creating, the economic impact they're driving for these smaller cities is vital. And Aftershock, while a great festival, and again, one of the largest festivals in the US, it's not branded to Sacramento.

It's not branded to California. You could pick up Aftershock and move it to any state in the country. And financially, if it's not viable in California, that's exactly what folks will start doing. So, I think that's something for this group just to understand that the economics of that are tough.

And I think it's valuable for the state to invest and ensure that they stay in California. Thank you.

There you go.

Hello, Chairman Ward. My name is Lauren Salisbury, and I'm the Vice President of Communications with Santa Monica Travel and Tourism. As a native Californian, I just wanted to say thank you for all the amazing work that you're doing on behalf of our state. I feel so proud to be a Californian, and I'm grateful for your continued work.

So, I'm excited to be here today to discuss some challenges that we're having on the local level in Santa Monica, which we all know and love as Los Angeles's Beachside City. I would like to discuss two critical challenges that we're facing that some of our partners across the state are but may be a little bit different.

The first is the downturn in international travelers to Santa Monica and the second is the negative consequences of the continued media narrative about Los Angeles wildfires and the impact that the historic fires in January had to the state. So, we love our numbers in Santa Monica.

So, I wanted to start by giving you an overview of our tourism revenue and economic impact historically. So, you can see that Santa Monica's top tourism revenue sources have been lodging tax, property tax, and sales tax. Of course, there was a sharp decline in 2020, followed by a partial recovery into 2022 and 2024.

And we were very optimistic at the start of the year that this would be our comeback year. Before January, our projection showed that finally tourism would—it would go back to pre-Pandemic levels, and we'd be able to champion that full recovery. But that hasn't happened.

And some important context on these numbers here are that higher TOT collections don't always mean that the hotel industry is healthy. Occupancy is still soft even if the numbers are high, forcing hotels to raise rates to stay profitable. And sometimes they discount heavily during low demand, which shows up as TOT, but then hides property level losses.

And there's a ceiling on how high rates can go before we lose our competitiveness to other destinations, and we're rapidly approaching that ceiling. So, here's the real picture of our hotel occupancy. You can see that in 2019, we were nearly full. We had 82.5% occupancy. Then in 2020, it was catastrophic. We dipped down to 38%.

In 2024, we were recovering at 76%. And again, we were highly optimistic going into this year that we'd be back up to those pre-Pandemic numbers, but now, the story here is that we're trending lower than last year. Now, why is this?

Santa Monica historically has been one of the destinations that welcomes the most percentage of international visitors. So, historically, pre-Pandemic, our city welcomed 50% to 60% of these international visitors. And that's significant for us because as Carolyn mentioned earlier, these visitors, they stay longer, they spend more, they come in shoulder season, they stay during the week.

And of course, we love hearing all the wonderful accents and get that cultural exchange. As people who live in Santa Monica, we love that. But unfortunately, since January, we've seen that the international travelers continue to decrease to Santa Monica, which is a big problem for us.

Historically, the highest markets that we had coming into our city were from Australia, Europe, and Canada, and all three of those markets have shown decreases. Then, of course, we all know in January, Los Angeles suffered historic wildfires, and it was quite devastating.

But if you look at the numbers, only 2% of the County of Los Angeles actually burned, and very limited tourism infrastructure was impacted by these fires. However, that was not the case if you were reading the news. The media narrative about the wildfires was catastrophic.

Some examples of headlines that we saw in our key feeder markets were, "Wildfires Ravage Los Angeles," "Hollywood Under Siege," "Travelers Report Seeing a Mushroom Cloud of Smoke Upon Landing in Los Angeles," "Apocalyptic Skies Spark Cancellations." And even if Santa Monica was not impacted, which, luckily, we weren’t, the fires did not reach our city, there was this continued narrative that continued for months saying that Santa Monica and the region were unsafe to visit and impacted by the wildfires.

We saw a string of cancellations, especially of group business, throughout the spring months.

And then, this summer, we still had people calling our visitors information centers asking if the city had burned down and if there was anything left to visit. So, it's quite distressing to see that this media narrative outplayed the real situation that we were experiencing on the grounds and led to increased cancellations.

So, these are our top two challenges we've been contending with this year, the past six months. And again, we're so grateful for all the support you're giving our industry and being here to listen to us today. Thank you.

While I'm waiting, my name is Rhonda Salisbury. I'm the CEO of Visit Yosemite Madera County. So, we have a small little attraction in California called Yosemite National Park. Very lucky where we live. Love being California. California native. Been in this industry over 40 years now, unbelievably, and there's been just a ton of changes.

We went from visitors guides with blurry photos to coffee table magazines that are beautiful with pictures, Reader's Digest ads. I don't even know if that exists anymore. You know, Better Homes and Gardens to TikTok videos reaching millions of people and AI that's going to bring craziness, but endless creative possibilities as well.

Our park rangers way back when pushed fire over the mountains for the beautiful firefalls. Now, it's common to have fire evacuation warnings. Lots, lots have changed.

One thing that remains the same is Yosemite National Park is still a top destination for the world, but it has a very fragile economic, you know, ecosystem, and we have a lot of mouths to feed now. So, direct travel spending in our gateways. So, we have four gateways to Yosemite.

We have the east is Mono County and that's 395. Gorgeous drive. And then north is Tuolumne County. West is Mariposa County and that actually encompasses most of Yosemite National Park or a lot of the main destinations. And then south, the gateway is the most traveled gateway and that's the gateway that we're from that we represent.

So, travel spending in the region is $1.9 billion. Hard to say that. Tourism-related employment is 20,000—over 20,000 jobs. Local tax revenue as you can see, 103 million. And sales state tax revenue is 70 million.

Like everybody else, headline news can make or break us. We've had a lot of chaos, craziness. The first of this year with news saying that we're terrifying. Yosemite national park is terrifying, scary, life changing to ailing Yosemite National Park. Did America ruin Yosemite? I mean, we're constantly fighting along with Visit California and everybody else.

These headlines that are over sensationalized in the most part. Also we've had for the last about 15 years wildfire, just like, you know, just like everyone. But wildfire is a constant threat to our economy. We had mice, hantavirus for a while, overcrowding, plagues, rock falls, flooding.

I mean all these things that are happening that can really destroy our economies very quickly. So partnering, I mean the biggest thing that I believe that we can do is partner with people, partner with our gateways. We need all the big gateway cities to bring people in all over the world.

Partnering with Brand USA, partnering with Visit California. Their programs help me increase my budget to be able to piggyback off of many of their programs. We do everything we possibly can, including sales missions all over the world. Partnering with other areas.

Morro Bay, we did the Rock to Rock car show and things, you know, just getting very creative. A lot of international, like everybody has been saying as well, you know, they come and they, they don't just come to one place in California, they come and they visit a lot of us.

So being able to work with our neighbors is very important. We also in Madera County, the southern gateway, we belong to three of the rural regions in California. So we're High Sierra, which is basically Lake Tahoe, to Sequoia National Park, Gold country, which is Sacramento, to Oakhurst, where I live, and then Central Valley is Sacramento, Bakersfield.

So we have a lot of different experiences to offer. We have to lean into all those all the time. We also have a company or a partnership called Yosemite Gateway Partners. And that's where we all get together and we talk about issues of regional importance throughout all the gateways. And then we get updates with Yosemite National Park.

So Yosemite has, over my 40 years, has been friendly and unfriendly. So about the past six years, it has not been very friendly to the gateways and we live or die by the national park being friendly to visitors and to our gateways as well.

So a group of us have been basically fighting for about six years to have the National Park Service let us have a seat at the table. The national parks do not have the infrastructure or the ability to handle the guests that visit them without the gateways.

And the gateways do not have the gateways without the national parks. So it needs to be symbiotic, and we need to have a seat at the table. I think it was in June, the Department of the Interior listened and put out an order where now the national park needs to meet with the gateways every quarter.

And this is all over the nation. We led this charge. It was quite outstanding. And we now get to talk to them and we now have a say or at least influence for them, destroying our economies or not. So we all love. We all love the parks. We don't want to overcrowd them.

We don't want these headlines and things. So we really want to work with them. That's an incredible win. The current outlook, the current situation right now we are definitely projecting about 15% down.

And like Santa Monica was talking about, you know, it looks like our revenue may be up less or maybe not that far down, but occupancy is definitely down. You know, we occupancy. We have to have the people to be in the restaurants, to do our attractions, to do all these things in order to keep our economies healthy.

This, let's see, this summer, we're expecting. Usually we're 95% occupied all summer, and we're about 75% now. Lot less or a lot less people. In our visitor center alone. We track. We ask people to sign our guest book. We talk to people from all over the world. And international visitation to our visitor center. Staggering numbers.

Canada, 62%, France, 70% down. Mexico, 66. And Germany 70. And Germany is our biggest market. And as Carolyn mentioned, that we definitely. They stay longer, they spend more, and they visit a lot of California. So we are hoping for growth. We are optimistic for growth next year. Hopefully the rhetoric, the chaos calms down a little bit.

We stabilize some. I wanted to talk just a little bit about these. The big events in the state. So, as you know, we cannot host a World Cup, we cannot host an Olympics or anything like that, but definitely Yosemite and our small rural regions rely on these events for our tourism as well.

This brings people, they travel across the state. So we absolutely support the gateway cities that are able to host these. These big events. They're so important. There's still unknown factors and threats that can seriously affect tourism in 2026. Wildfire. We are always afraid of wildfire. The increase for international visitors to national parks. We don't agree with that.

It's already very expensive. Carolyn mentioned some of those numbers as well. But having internationals pay more to visit our national parks is not a, "Hey, welcome, come on in," statement for us. Yosemite reservations. The restrictions on these are unknown at this moment. We luckily have a seat at the table.

We hope that they will listen and we think they will. There are times when Yosemite is overcrowded, but that is very few days of the year. So having overly restriction is very oppressive to us. The international visa visitation policies obviously is scary for us. And then insurance costs.

Insurance costs are just killing our industry everywhere and our homeowners too. In closing, basically, we just want to continue partnering together both of the tourism industry and our legislators. We need to help keep California friendly, open and find a way to make it a little more affordable for all. Thank you.

Good morning. So I'm Kerri Verbeke Kapich. I'm the COO at the San Diego Tourism Authority. I apologize for having my back to you. So really sorry about that. But thank you so much to the Chair for inviting us. Thank you to your staff for helping to prepare us for today.

And really welcome the opportunity to talk about tourism and what it means to San Diego. So in terms of the importance our tourism economy, it is a vital sector for San Diego. It is considered our second-largest sector behind military and defense. So really critical to our region and the economic health of our region.

In 2024, we hosted 32.5 million visitors. About 80% of those were leisure travelers either for vacation or to visit friends and family or coming in for some other personal purpose. And the rest were business travelers. So mostly meetings and conventions, but also independent business travel. In regards to their visitor spending.

So unlike the rest of the State of California, we actually hit pre pandemic levels in 2024. So we are doing pretty well on the visitor spending last year. So that was 14.8 billion was visitor spending. That's 22 billion in total economic impact. And it is one in eight jobs in San Diego.

So tourism is critical to our community. In context the military, for example, is 1 in 8 or 1 in 5 jobs. So it gives you a little bit of a context. The tourism community, it's 9,400 businesses and many of those are small businesses. Over 90% are small businesses.

So when we talk about visitation and spending and operational expenses, these are really smaller operations that are very reliant on basically making sure that there's economic health and the ability to control costs as they go forward.

So overall, in terms of tax revenues, San Diego tourism sector generates over 1 billion in tax revenues through sales taxes, property taxes, and TOT transient occupancy taxes. So whether it's tax generation jobs or just even support for core infrastructure like our airport, it's really critical that our tourism economy is healthy.

When we take a look at some general trends, what we see is that travel this year in 2025 is weaker than it was in 2024. So prior to the pandemic, we hosted 35 million visitors. We had actually more day visitors into the market than we do currently.

That goes to the Chair, Vice Chair Lackey's Point in terms of infrastructure and travel in and out. So travel from Los Angeles into San Diego, for example, our freeways can get a little busy going north to south. And so we have seen less visitation coming in for the day versus overnight.

We basically did see during the pandemic, huge economic losses. So we had 50% unemployment, which was absolutely devastating. We had business closures and huge lost tax revenues. So we've been rebuilding our tourism economy ever since, year over year. And we've been seeing continued improvement up until really now.

And we did take a look at forecasting for 2025, and we had forecasted flat performance for San Diego tourism. We saw that there were headwinds with the economy, what was going on in terms of political uncertainty, and we knew that we were going to be getting into a cycle of challenges. And that's exactly what we've seen.

So while overall visitation is up 1.5%, visitor spending right now is down nearly 2%. So people are looking at how they can save dollars when they travel. So maybe they're doing less activities, less days in the market, choosing to do free activities versus paid activities.

They're making choices, which is what any individual will do when they are planning travel and discretionary spending. Our convention center attendance is up, but spending is also down for convention attendees. And conventions are big part of the lifeblood of the downtown San Diego area.

And so when you see a decrease in spending, that really impacts our retailers and our restaurants very hard. Our occupancy for hotels is currently at 72.9% through June. That is down 1.1% year over year. Now San Diego has had some more supply come into the market.

We had in the Chula Vista area, a new hotel opened up, the Gaylord Pacific. Beautiful property. So we now have more competition, and we're certainly seeing though the demand is there, occupancy levels have dropped with the supply coming in.

So some of the things that are going on, so on the group and business travel, it's been fairly resilient, although we've had challenges. So earlier in the year we saw cancellations from meeting groups that were either government funded group or receiving funds like NIH funding coming through and we lost business pretty, pretty quickly with cancellations.

We were able to pick up some short term corporate meeting business to help fill that in. But that has certainly been an uncertainty in terms of what is the policy towards government spending across different sectors, whether it be education, government travel or life sciences and biotech, which is important to us.

Leisure travel is 80% of all travel to San Diego, as I mentioned, and it is seeing softness. As I said, our holiday weekends are doing very well, but other weeks have been softer. So July is always the peak travel season for any type of travel business and for us it was fairly flat year over year.

We had a nice three day weekend with the fourth of July. We had Comic Con in town in Esri, so really big events going on, but still did not see a bump in terms of visitation and spending.

Flat, as I had said almost a year ago, flat was going to be the new up and it's been kind of that way in some cases. And then international, it's smaller for San Diego versus our major gateway cities and even our rural destinations. It's only about 10% of our overall visitation into the market.

In that case with international, visitation from Mexico has held steady. As you mentioned earlier, Chair Ward, these are our friends, our family, our neighbors, and they still come into San Diego. They feel very welcomed and at home in our community and that has continued to be steady.

Europe has been mostly okay, especially with the UK market, but Canada and Asia down dramatically both from the pandemic with Asia and then most recently with Canada. On the international side, we don't see recovery for San Diego until 2029. We pushed that back from previous forecasts. We thought 2026 would be our year.

It'll be 2029, hopefully not longer than that. In terms of bright spots ahead, so we're very fortunate that we have a large drive market around California. When I take a look at California, Arizona and Nevada, there's 50 million people.

Again, to the discussion about infrastructure and the ability to get people here and get them around here, how important that is. And I'm so glad that this Committee is thinking about that and talking about that. So we do have more efforts that are targeting closer end markets as opposed to long haul markets and international markets.

We've had to hone in our targets. For 2026, we do have good business on the books at our convention center. So we're looking at some new events that are coming in. On average, we have about 55 primary events into our convention center.

We have some new events that have come in like TwitchCon and Society for Neuroscience, which has been steady, into San Diego. I will say that conventions are very competitive to get to destinations. Many convention centers lure with incentives, do discounted space or discounted services. That makes it very hard to attract and keep conventions.

So that is something that continues to be a challenge for all of us in this space. We are fortunate that in San Diego we do have a great reputation for quality experiences that attracts strong attendance. And so meeting planners like to see that they can take their attendees somewhere where people want to go.

And very much California is a place people do want to go, if they can. In terms of events, major events, as you've heard from from everybody here, they are a major draw for tourism.

And when it's hard to build a new attraction or a new luxury hotel or whatever the case may be, bringing in an event that's a four-day event or a three-day event that relies on existing infrastructure is a very affordable way to drive demand.

However, it is difficult because attracting events is competitive in terms of bid fees. Going to events to get them to come to you and decide to be in your destination. So it's not only the bid fees, but then hosting fees. So just a few examples for you. For WWE, they're bringing in their Survivor Series.

So in order to get that series, which is over Thanksgiving, which is a need period for most destinations, it meant having to basically help fund underwriting for San Diego and Petco Park where it's being hosted. So that was something that our community and Petco Park had to work out in terms of hosting fees.

For Father's Day next year, NASCAR will be in San Diego racing at the Coronado Naval Air Station. It's in celebration of the Navy's 250th anniversary. We've not been asked to put in funding. We're super excited to have NASCAR there. They're happy to bring the event in and to support our military and our community.

It is an amazing opportunity and I tell you, it's a treasure that doesn't happen very often. It is an event that will be broadcast and NASCAR and F1 racing, as you know, are extremely popular globally. So we're excited to have that into San Diego.

And then World Cup matches won't be in San Diego, but we do expect that we will get some spill into San Diego. And we have been fielding calls from event organizers looking at San Diego, whether it's tied to World Cup or to other events.

And I wanted to give you a sense of what it takes to underwrite some of those events because they typically come to a community and they ask for underwriting.

So we currently have soccer looking at San Diego for future events and they're looking at 5 to 6 million in hosting fees that the destination would need to pay in order to attract that business into our community. We've also been talking with an international sporting competition that's looking at, to your point earlier about longer term planning.

They're looking at, I think it's 2031. That's $10 million that they're looking in terms of support from the community. So whether that's through government raising it privately, through corporations and sponsorships, I will tell you that to come up with the dollars to attract events, both to bid on it and then to host them is significant.

And there is no dedicated funding revenue stream for events within communities. It's not something that exists with local government. And it is something that would be amazing to see California take a look at that going forward. 21 other states have grants for sporting events.

And we take a look at what's been done in terms of the film industry and tax credits and other things. That would be an amazing opportunity.

I think that would benefit all of us, large and small because these are events that are not always major events like a NASCAR or like an Olympics, but could have a huge impact for rural destinations and smaller destinations. And San Diego would benefit greatly. It is a challenge to help support these events. Last thing I'll talk about.

I was asked to speak to just some of the issues as it relates to our border region. We are the second-largest border crossing in the world. There are 200,000 crossings daily for work, education, shopping and leisure for San Diego.

So we consider ourselves a binational region with a Calibaja spirit that infuses our people, our culture, our arts, our architecture, astronomy. It is just who we are as a people. We are over 7 million between the two areas.

We work very closely with the Regional Airport Authority, the port, and also with Customs and Border Patrol because there's long been a discussion about not having enough staffing because we have three ports of entry.

So I know that that is something that's being looked at to increase federal staffing for Customs and Border Patrol for San Diego and for our region. We need more boots on the ground, if you will, more people to help facilitate and process.

We've had challenges in the past where our staffing was stretched so thin, we were unable to bring in additional international flights to San Diego because there was not enough staffing to support that. So very challenging. And we've had great support out of our congressional leaders at the federal level to help try and address that.

So we would just continue to ask for support around that. There has been, unfortunately, negative press on international travelers going into Mexico and then traveling into San Diego. It was cases where people were maybe not aware of what the requirements were and did not have the proper documentation. So that is something that we all deal with.

And we lean quite a bit on Brand USA to help us with that, our US Travel Association to help us with that. So the big thing there is just making sure people understand what are the rules and the requirements.

And so we've tried to make sure we're very proactive in communicating that out and visit California does that as well. And then the last thing I'll mention is just what's going on. I'll go back. Sorry about that. But the Tijuana River Valley, this is. We share a watershed with the Tijuana region.

And unfortunately, we have up to 25 million gallons of treated and untreated sewage that flows every day through that valley, through that river. And it is sewage, plastic, heavy metals, chemical pollution, and it's all in coastal waterways. We had since 2015, over 1,000 beach closures and advisories. It is a public health emergency for San Diego County.

In 2023, it was declared a public health emergency by the 18 mayors in our entire community. We've worked closely with the San Diego Regional Chamber of Commerce and with the Mexican government to take a look at what can be done more proactively. Because this is a 30-year problem. It's not something that just happened.

So the more that we can all do to really make sure that the EPA is looking at this, that we're proactively and aggressively putting in new facilities and treatment, that the funding is there both at the federal level and the support at the state level would be greatly appreciated.

This impacts all of our beaches along the lower part of the San Diego County area. It impacts the military. We have Navy SEALs that are training in the waters off of Coronado.

So it is something that is really important to us as a community and making sure that we have the ability to take care of our community, our people, but also our travelers into San Diego. With that, I will say thank you so much for the opportunities.

Thank you all four of you, for your presentations, for the work that you do for your respective home communities. Certainly, I think we saw and learned a common thread. I think they're across a lot of our submarkets here, but also some things that make each one of you unique and special and worth visiting as well.

I'd like to turn this open to any Committee Member. Questions or comments? None from Vice Chair. Assemblymember Quirk-Silva.

Thank you for the presentations. I missed the first few, but I looked through the notes so there definitely are themes going on. It does appear that in 2025 there is a response coming into the State of California for tourists. Is that correct as a whole?

So there's a lot of points here, but I do want to just drill down right now on the Tijuana border as I've had the opportunity to be out there on Tijuana river and see firsthand those impacts. And I also have family members who live in Chula Vista so they interface with this.

It's a little bit unknown in California, this impact of these beaches being really closed. People who live there say oh yeah, it's always closed, so that's not a good thing. But because I have family members who live on both sides and we did a interfacing with some of the Mexico's legislators.

They were talking about the Tecate crossing and because of the border patrol now closing the border more often, just at many times that the Tecate side can get backed up now for sometimes what used to be the faster crossing, but sometimes for two or three hours.

And so you have we had actually the mayor of Tecate speaking to us and saying that that idling there of these vehicles that are waiting to cross either cross over is now becoming a very big impact. So I guess my question in all this is are you communicating on both sides of the border of some of these impacts?

And again, what was an easy crossing for people to come into work and mostly the San Diego area and then go back is now becoming quite a big issue. And then going to the other part of the border is cars coming from California going into the Mexico being stopped much more often than in the past.

Maybe they're taking a load of clothing over, but it's become just kind of a bottleneck of both of these entrants. Have you heard about these or is the Chamber of Commerce talking? Is there any international conversations?

So the Chamber of Commerce in San Diego does a fantastic job in terms of relationships and really looking at infrastructure, border crossings, ease of facilitation and then at the federal level with the US Travel Association really efficacy around faster processing.

So Biometrics, for example, what other things can be done to facilitate ease and speed so that we can start to get rid of some of the bottlenecks.

So, yes, there is definitely conversation and we'll continue to make sure that we keep an eye on what's happening with Tecate too, I was not familiar with that, so I will talk with the chamber.

Yeah, he was very concerned about the pollution that's just sitting there as they're waiting sometimes 2 and 3 hours to cross. I know you interface with this area quite a bit, but then following up just on a broader.

When we look at the international tourism, I know that when we were looking at the Asian tourism, that that was down after the pandemic and it's kind of creeped back up. But now we're looking at Canada, as you mentioned, Germany, other countries that travel seems to be down.

I think we can all conjecture of why, but I'll just say I think some of the rhetoric at the Federal Government is contributing to this. And we've had I represent resort area, which is Disneyland and Knott's Berry Farm, and I do think there's a real hesitation to call that out.

And I know that there's nervousness or fear, but the truth is that when we see these billions of dollars of impacts on our economy, this is real. This is real to communities. This is real dollars.

And we were seeing such a robust improvement after Covid and almost back to where we were before Covid, and I think no one expecting like this drop. So, you know, not trying to get in a fight with my Republican colleagues, but we're just, what? Okay, that's okay.

Well, we can agree or disagree, but what I would say is the economy and these dollars, it's what not just fuels California, but it also fuels the Federal Government.

So any tampering down to countries that have always been part of our North American alliance, Mexico and Canada, we should do everything we can to continue those robust friendships and partnerships. Because it's not just dollars in the economy from business, but it's the travelers.

We know that in Palm Spring area, where Canadians many times spend their winters, we've seen those down. So we can't fix everything with just a phrase or a slogan, but we can be part of let's do more to be friends again.

Absolutely. And Carolyn Boteta earlier from Visit California, talked about just the nature of California, more welcoming and inclusive into making sure that we continue to put those messages out there and that that's embodied in our communities. So absolutely agree with you.

Thank you Assemblymember. Assemblymember Zbur.

Thank you. Thank you, Mr. Chair. Thank you for calling this really important hearing today. And I want to thank all of you for being here today. It's I caught most of the presentations, particularly grateful to have folks from Santa Monica here who I represent and had a couple questions.

So first, on the Santa Monica slide, one of the things I noted was that the tax, even though we're showing a projection of being down compared to 2019 post-Covid.

Pre-Covid. Post-Covid, the tax revenues are up. Can you describe why that's the case? Are there rates going up? It sounds like if the--that the volume is going down but the rates are going up, and is that an impediment to full occupancy in our hotels and actually bringing people back?

Sure. Sure. So actually the rates are going down, so--the rates of the hotel rooms--so in order to fill those rooms--

I mean the tax rates.

I'm looking at this, this chart here where you basically--it's showing lower--higher tax revenues than in 2019, and the other slides I'm showing are showing volume of hotel stays going down. Is that...?

Oh, the tax rates?

And, sorry, what's your question specifically?

Why are the taxes going up when the volume is flat or going down?

Got it.

Compared to pre-Covid.

I think, transparently, I'll have to dig into that and get back to you.

Second--thank you for that--you know, I've been--I was actually out at, on the pier just last week and one of the pier operators was telling me how, you know, how much just the business on the pier has dropped compared--in part, they're attributing it to the fire and all the things you were talking about in terms of perception of Santa Monica being a burn zone and then in part, I think, some of what's going on at the federal level and people being afraid to travel to the United States, some of these international travelers.

I mean, have you gotten any sense of, is there any way of understanding what the impacts are, have been of sort of the militarization of Los Angeles and what that's having on the tourist economy?

And the reason I say that is I remember when I was out of college--actually at a law school--I ended up traveling through Europe, as many young college kids do, and at that time, I remember spending time in Barcelona and they were actually having some kind of civil unrest and there was military in the streets all over the city, and I was so creeped out by that that I didn't go back to Barcelona for like decades, and now it's, Barcelona is one of my favorite places.

So I'm just wondering if we have any sense of gauging what's, what these federal policies are doing in terms of disincentivizing or causing fear for people to travel to Los Angeles in particular because of these, the militarization in our streets.

Yes, absolutely we do, and with the pier, they've really been a bellwether for sentiment of travel within our community, and we've seen big fluctuations the entire year. So the pier, unlike our hotels, their, their businesses get 50% visitors from overseas and 50% of locals.

So they really rely on that balance of the international visitor and the local who lives there. So interestingly enough, while they've been contending also with the downturn in international travelers, they've suffered for multiple reasons the past six months due to the lack of local travelers. First we had the fires, and of course, for a few days the air quality was impacted, so no one wanted to be out, but we saw that sentiment continue for months.

Angelenos, or people who would typically drive down to the pier for a weekend, they just weren't coming out, and then circling back to transportation and infrastructure, the 10 Freeway, the exits into Santa Monica, there's three exits, and they were all closed for three months, and then we all know that Highway 1 was also closed for a number of months.

So again, locals who might typically come to the pier for a nice afternoon getaway and frequent those businesses, they just weren't coming out. So then we finally were starting to see that narrative locally about being outside and the quality of the air--it was safe again, they were returning, and then when we started to have protest activity and federal government got involved, again, we saw kind of a shuttering locally.

People did not want to go out. They didn't feel comfortable driving, having to maybe cross through that. They were uncertain. Are they going to encounter anything? Is it going to be a more difficult drive?

What's the vibe going to be like? So again, we saw shuttering, and the pier has reported that during the recent protest activity and the National Guard being in Downtown Los Angeles, even though that's 16 miles from us, visitation to the pier was still down to 30%. So they've really struggled, and it's been disheartening to see kind of a start and a stop with the pier.

First the fire, then we had optimism again, and then all of this noise at the federal level and some of the activity in downtown, which again, 16 miles from us, it has again made those locals not come out and frequent businesses as much.

This is for anyone. Are we tracking, in the sort of the nearer term, the decline in tourism, both local impact, but also the international impact? I mean, it's--I don't know that we necessarily know why Canadian tourism is down, but I can probably guess given some of the messaging that's been coming out of the federal government, but is there--what's happening in terms of tracking that and trying to understand what the reasons are for the drop in international tourism? Who's--what's out there that's detracting them?

I can take part of that with Yosemite. So we had a kind of a double whammy on us. So reservations for--international travelers book six months normally in advance at least. I mean that's when they're coming and they're doing these big trips for us.

And with our reservation system not being announced until April with all that was going on, it made it really hard for international travel agents. They still use a lot of travel agents to book people into our destination. So that was rough, and then also, you know, not the non-friendly attitude that they were getting from us.

We are tracking in our visitor center basically, and that's, you know, and you know, we see people in locally, you know, we're running around town. We see a lot less international than we have.

The market of Canada, specifically at Santa Monica, we have data that shows its federal level rhetoric that's impacting travel. One of our key strategies to drive visitation to our city is by hosting journalists from these markets to come on a press trip and then write about their experience in the destination, and we hosted three writers from Canada in December and we're in talks with them to place articles in key publications in that market.

They'd been working, and then come January with some of the rhetoric, their editors said for all three of them they were no longer able to publish the content on California, so we know that that decrease in media coverage that's positive and shares that message that we are welcoming and open for business has really hurt us.

Thank you.

I'll mention the other thing would be looking at airline seats and arrivals that are coming into gateway destinations. So how is Air Canada looking into LA, for example? How is British Airways looking into San Diego? And most of us at this table are doing that. That gives you an immediacy, but it doesn't, to Rhonda's point, take a look at what's happening six months from now unless you're looking at how people are booking.

So there could be a long tail impact on international that we'll feel more next year than we're feeling right now, and it's, it hit pretty fast now. Could be even worse next year.

One of the things I discussed in Sacramento is the music festivals we hold, Aftershock being the largest one. Typically we get about 560 Canadians that come to that festival. If you average that each person is spending about $900 into the market, that's significant economics. I don't know what those numbers are yet because the festival doesn't happen until October, but what we're seeing with other events from folks in Mexico and other parts, I expect those Canadian numbers to be down as well this year.

I'd encourage you all, as you're, as you try to understand this, to sort of gather that information and send it in to our chair and our committee staff because I know I'll be really interested in seeing sort of this. I know that a lot of this has happened very recently.

And now, if I can have one more question? Do I have enough time? Last question, I guess, is, you know, I have this perception, I see what other states do in order to try to market the state, and, you know, we have a, you know, we are the top destination in the country.

We're also a very, very large state, and I was just wondering--maybe just one quick question for each of you--if there was one thing that we should be doing in California that we're not in order to protect both the importance of this industry and potentially to grow it just in thinking about what we should be thinking about for next year, what would be your one recommendation or two?

I'm happy to start. I think what sets California apart is our values as a state and our long history of welcoming people from around the world, and as we're seeing such a sharp shift federally and in many other states, I think we need to double down on that 'welcome for all' message and make sure that visitors from around the world know that when they come to California, they're going to have a safe, fun, and welcoming experience.

I think for Sacramento, it's incentivizing some of the larger festivals to remain in California. As Kerri mentioned, rights fees for these, these festivals are significant. I was presented one yesterday that the incentive from Visit Sacramento would be $1.5 million plus city services. I've got a budget of $16 million.

Hard for me to commit to that, and when you look at some of the other states--and you weren't here when I gave my testimony--Kentucky, for instance, will share some of the tax revenue that's generated by the festival, much in the same way film incentive is done in California.

I think those are critical because there are other states that are actively trying to recruit the festivals that are driving significant economics for California.

And I think continuing to support Visit California's efforts is huge for all of us. We definitely partner with them on everything we can and their reach is so much bigger than any of us individually, but collectively, we're big.

Wildfire, of course, can keep focus on wildfire, keep doing what we can do in our forest, and insurance--somehow to get the insurance rate so we can bring down our hotel rates and we can be a little more affordable.

I agree with everyone that they--or everything that they've said. I would add that our partner at the federal level is Brand USA, and Brand USA also requires funding, much like the State of California does, and much like we do in San Diego and Sacramento and other places.

So making sure that Brand USA is healthy and that we do an amazing job with World Cup next year, that is a phenomenal opportunity for the State of California, and then we have the Olympics coming up. So the more that we can do collectively together to make sure that we put the right message in front of people and that we do so in collaboration, the better.

Thank you all for being here. Mr. Chair, thank you for giving me the opportunity to ask these questions.

Of course, of course. Thank you. Mr. Lackey.

Yeah, I just had a quick comment that I think that it's important that we as Californians, and especially those of us who are elected officials, that we try to overshadow some of the negative messaging that seems to be going on right now. It's up to us to lead.

It's up to us to show that we're proud to be Californians and we're proud of those who want to come and visit us, and I think the previous presenter showed the way to do it.

There's a way to show that we're proud and we can overshadow some of these other messengers that are trying to decry fear, and we have to overcome it, and there is a way to do it, and I think that we have all the right tools.

We have something very unique that the rest of the world doesn't have and that's California coastline and inside--our forests, our mountains--everything that we have is so diverse and we appreciate the diversity of people as well, and I think that once we message that we can kind of mute some of these other influencers.

Like the whole fire thing was characterized really unfairly and I think those are things that we can overshadow. Show pictures. Show pictures of how beautiful it still is and be excited; be excited and not bemoan and get caught into this, this vacuum of discouragement. Let's lead and let's be proud of California because we have way more to be proud of than we have to be apologizing for.

Thank you, Mr. Vice Chair. I think, building on that, what do you, as sort of individual--I know San Diego's strategies very well for its direct marketing, but for any or all of you, what are you seeing as like your direct opportunities to try to separate that brand as Yosemite, as Santa Monica, and where do you see partnerships between regions so that if we can get somebody into San Diego as a first base that they are also coming to Santa Monica, coming to Yosemite, coming to Sacramento, festivals, is there--what's the level of collaboration between your respective organizations?

I would say we're a very collaborative community because at the end of the day, it takes each other, so you've got to be able to have the ability to get people into California, whether they're landing in LAX, but then they're also wanting to see San Diego or they're wanting to go north.

So we do quite a bit of partnerships around joint marketing efforts. We work very closely with Visit California. We'll do hosted media trips, so to the point that was talked about earlier, bringing media in, but we've had them do super FAMS where they're going throughout an area of California or with the travel agents and tour operators.

So really important to show the diversity of the state, the diversity of our people, the diversity of our experiences, which means you want to be able to showcase everything that is on offer. And you know that from San Diego because that's kind of how we do it down there and that's a microcosm of what you see across the state.

Yeah.

Yeah, absolutely. We--current marketing, you know, with all the headlines that we've been facing and what--to your point too--we just started a campaign, Headlines vs Reality, where our influencers and our locals are going into Yosemite and saying, 'hey, this is where we're here right now.' It's not chaos; it's beautiful, it's stunning.

Yeah.

It's not overcrowded, things like that, and then just partnering like I talked about before with Rock to Rock or surfing in the morning on the beach, beautiful California beaches, and then climbing Half Dome in the afternoon, what have you. Just partnering is so important.

Yeah, I think it's been mentioned a couple of times, but Visit California is an invaluable galvanizer. We all collaborate with them. They lead so many conversations for us. The Terra Madre food conference that I mentioned, they set up a call with the destinations across California to get other cities to come into Sacramento and help with that.

Santa Barbara, Anaheim, a number of different destinations will be here, and I think we, you know, communicate with close proximity cities like San Francisco, that a group may come in and tour San Francisco for four days and we try to get an additional two days in Sacramento onto that Northern California tour. So there's great communications between the destinations and Visit California really leads that conversation.

Thank you.

I'm going to sing the same song and say that we love to collaborate. It's one of my favorite reasons to be representing the state because we do work so closely together.

Yeah.

Tourism is a very relationship-based industry, so a key strategy for all of us is to be in the markets that we're trying to sell to and meet with those key contacts, whether it be tour operators or travel agents, media or the airlines, so Visit California takes the lead on arranging really robust missions for all of us to travel to India or China or Europe and have those conversations and get in the room with all the key players that we need to.

For Santa Monica specifically, since we do have such a high rate of international visitors, these folks are definitely visiting other parts of the state. The top two itineraries that they tend to follow would either be Route 1, so starting or ending in San Francisco and driving along the coast down to Santa Monica or something that we call the SoCal Triangle where they start in Santa Monica then go out to the desert in Palm Springs and finish up in San Diego.

Yeah. For all of you, I guess everyone was talking about, you know, the Canadian response and how clear and extreme the downward trend in visitorship is. Is that causing you, based on that evidence, are you doing any specific marketing to Canadian media or Air Canada magazines or are you looking at, again, distinguishing either your region or California from other opinions about visiting other, other parts of the country, but is that, is that a strategy that you are embarking on?

So for us, it's been all relationship management, so making sure that we're continuing to work with media and influencers, travel agents, tour operators, educating them and keeping those relationships strong. So they may not be seeing the demand right now, but they will in the future.

So the key is to make sure we maintain those relationships and that market presence with our intermediaries so that when things do start to turn around--and they will turn around and Visit California, it's done great messaging to the market. They know San Diego, they like San Diego, they're familiar with San Diego.

Load factors on some of our Canadian Airlines are still fairly stable. So we're continuing to hold that course, and that's really the key is continuing to hold the course.

Got it. I was curious, for Ms. Salisbury from Yosemite: two things. One, I'm really heartened to hear about your focus on some of the gateway points, cities, towns into the, into the valley because they're wonderful to stop by and you don't want to just drive by and miss them.

I think there's a lot of interesting experience and something to appreciate from a lot of those home communities as well, but for the early actions that we saw earlier this year towards National Park Service staffing levels, how much of that factored into what was sort of the economic consequence, I guess, of that, that disruption?

And do you see when, as you're now seeing sort of the first six months of the year and what it's been sort of overall based on tourist interest, are you able to delineate as well the impacts that maybe are more specific to support levels being down, loss of jobs from some of those federal jobs that are cut, loss of funding to support the park? Is any of that very distinctly something that you can witness?

It's hard because a lot of that was really blown out of proportion. We have more staffing than we've had in many years in the park, in Yosemite itself. Our forest is a different situation, but in Yosemite itself, we have--we are not fully staffed.

We haven't been fully staffed for 20 years at least, you know, but we have more staffing. It was--at the beginning, a lot of it has to do with like locals as well, so the local sentiment, cuz all the staff that was basically let go at one point for several weeks, all the seasonal staff that live and work in our communities, the--everybody was, it was depressing. It was honestly depressing. And then the news coming out and all these things and then when we start getting back into everybody's got their job back. You know, it was like a three-week, two, three-week period.

It seemed like years to me, but you know, we've actually, we've recovered really well, but we were too late in the recovery process to recover for economically, you know, so nobody's saying, 'hey, we're overstaffed' or 'we have enough staff now,' but we're not seeing, we're also not seeing these huge lines as well.

And then as I mentioned, the reservation system being, being less than it has been, which is good, but it's being announced so late. It was really hard to plan and everybody went somebody--somewhere else, you know. A lot of people went somewhere else, so, we'll kind of answer that.

Yeah. Encouraging to hear, yeah, because I think, you know, we rest with some of the media headlines that we see that, you know, famously the one person that was the keysmith for certain blocks was not able to open up restrooms or what--and got hired back, but you don't often get that direct source for what's really going on on the ground, so it's, appreciate to be able to hear that as well and appreciate that we have Sacramento here in the house.

You know, I will just state for the record that I'm really proud to go when I'm down in San Diego and everyone wonders what's it like to be up there, and Sacramento is a great town, you got some fantastic restaurants and it's a wonderful place to visit, love being a weekly visitor up here while my, you know, home and heart in San Diego.

There's a lot going for it and so you clearly are making a mark and really trying to showcase and distinguish Sacramento for other domestic and international visitors as well.

And I guess I just want to close maybe going down the line with sort of a same question that I had asked as well for our first panelist. What are things--maybe do you have any sort of final parting thoughts that the Legislature can focus on?

And we, of course, don't control federal actions, but how, kind of living in this era that that we're in right now, might you make recommendations that we can think about tailoring either budget or policy work, probably more on the budget side--we'll see next year--to be able to help to counterbalance some of the challenges that you're facing and what would be sort of your best advice?

I think that filmings in the state represent a real opportunity to showcase to international visitors the positive sides of California, and filmings are way down, so the more that we can do to get filming back to California and have the state on the big screen, showing people how amazing it is here, the better we'll have this Hollywood leverage to counteract the negative media narrative at the federal level.

Yeah.

And I think it's continuing to invest. You know, you look at the Olympics, you look at soccer; those are Super Bowls, obviously, in California, those are huge economic drivers, but the smaller cities that don't have the ability to host those, you know, Aftershock is our Super Bowl. Those music festivals are vitally important to us, and again, I think, you know, if everybody was making tens of millions of dollars on music festivals, we'd all be doing them.

They are slim margins, and we're at risk of losing them to states that aren't as expensive as California. You know, when I compare Aftershock to Louder Than Life in Louisville, it is cheaper to fly to Louisville, it's cheaper to rent a car in Louisville, it's cheaper for gas in Louisville.

So from a promoter standpoint, it's easier to do this in other states and I think the loss to California would be tremendous. So I think it's worth looking at those in the exact same way you look at filming. What's the economics driving and what's the risk of losing it?

Thank you.

I, you know, I just go back to supporting Visit California, you know, just supporting our, our leaders and our, you know, being able to partner with them, especially as a small destination or small, small marketing budget, things like that, you know, being able to partner and, and working on wildfire, working on insurance. I mean, those are the big things for us.

Okay.

I think the fact that you've brought people together for conversation and that what you're hearing and what you're understanding is that there are challenges that the industry is facing and that that has a very real impact on our communities, so we appreciate the fact that you've asked the questions and that you are looking at an industry that, you know, has gone through a lot, from a pandemic to recovery to, you know, challenges now.

So the more that you can do to help the industry in that regard and the community in that regard because we are such a vital part of the economy, and then looking at ways to help stabilize for events and things that we're looking at, whether it be filming or events or other things, that can give us a competitive edge so that we can compete on that global stage because it is a global competition at the end of the day.

Very much so. Thank you. I want to thank all of our panelists as well for giving us the local perspective and the thread of experience and do appreciate the committee members here that are participating today.

We are going to move to the public comment portion, but while you go ahead and get comfortable and excuse yourselves, I just wanted to highlight, and again thank our consultant and committee secretary as well for really putting together a fantastic journal of today's presentation.

So for committee members or non-committee members or members of the public that wish to be able to dig into the snapshot of time that defines sort of the today's status on the tourism industry, I think we'll have this housed on our committee's website as well as have a couple of other printed binders here as well too.

With that, the microphone is open for any members of the public who wish to add on. I think we wanted to be out of the room by noon, so we have a little bit of time. If there's any interest, you can have one plus minute to introduce yourself and give your thoughts.

Good--it's still morning--good morning, Mr. Chair and members. Thank you so much for the opportunity to speak. My name is Sabrina Lockhart. I'm the Executive Director of the California Attractions and Parks Association.

So everything fun in California, that's who we are, and our members really take pride in being a part of our guests' most cherished memories and the role that we play in tourism as a whole. You think about our members, you think about our castles, our roller coasters, our seaside ferris wheels--all of those images tell the California Dream in just a single picture or video.

And this helps the entire tourism ecosystem, right? People plant those seeds, they want to visit--that means more hotel night stays, more dining and restaurants, and so we really cherish and take, take pride in that. We welcome 121 million guests each year. We create 131,000 jobs and generate $4.2 billion in tax revenue, so a pretty significant part of the tourism economy.

And while today's hearing put a spotlight on on the federal impacts, it's also important to widen the lens a little bit and think about how state and local policies can also impact the tourism industry.

Lately there have been policies that single out hospitality with like industry specific wage increases that hurt workers through decreased take-home pay, fewer jobs, increased costs for consumers. So we're certainly mindful of how that impacts tourism.

And specifically in our space, there are, there's a significant investment in attractions in California, but when you look at where brand new parks are going, it's to other states and to other countries, and another example that's troubling is a prominent theme park company purchased 24 parks nationwide, and within months, they sold just their California assets.

So I wanted to make sure that you were aware of that. But our industry is more than numbers; it's about the people, and I'm sad that Assemblywoman Sharon Quirk-Silva left because she's this shining example of our industry. She was a former cast member.

Senator Valladares, who was a former vice chair of this committee, also worked in theme parks. So you know, we have a career pathway. Half of CAPA's board of directors, which are senior level executives in parks, started in an entry-level position, so there's, there's more to offer from our industry if you, if you'd like to advance.

And we're connected to our communities. Covid forced us to close for 14 months. Yeah. It's amazing that a business that was closed for more than a year is still in operation today, but during that dark time, we opened up our parking lots for food bank giveaways and vaccination clinics, and this hearts of service is just at the core of who we are and we continue that with thousands of ticket giveaways each year, food donations, and wildlife rescue and conservation.

Magic Mountain this fall will open a huge solar project and it will provide shade for its guests and offset 100% of the park's operations. The Pacific Wheel, which is on the beautiful pier that Mr. Zbur talked about, is 100% solar. It's the only one in the world. So we take great pride in our environmental leadership. In SeaWorld, in Assembly Member Wards' district, in its 60 years, it's rescued 42,000 animals who are sick, injured, or orphaned. So we're more than just fun. We help too.

Thank you. I appreciate your well-rounded comments and definitely something that's integral to our tourism industry too.

Okay. And just looking ahead to the Olympics, Walt Disney was the chair of the Winter Olympics in Tahoe, so this isn't new to us. They've strategically aligned some of their leaders. Three of our park leaders are on the Visit California Board so we have a global interest in tourism.

Then I wanted to mention that Universal Studios Hollywood will serve as an Olympic venue. Squash will take place at Courthouse Square, which is where the Back to the Future trilogy was filmed, so, you know, nothing more iconic, nothing more Hollywood than having an Olympic competition, and we look forward to working with you all to make sure that California remains a global destination.

Thank you very much. Any other members of the public?

Thank you very much, Chair Ward. I see some familiar faces. My name is--thank you. Absolutely. Thank you. My name is Jordan Rivers. I'm the Chief Liaison and sole organizer for the Global Residents Initiative, which is meant to revitalize our existing global ties in the community here in Sacramento by reconnecting lawmakers with their overseas counterparts and their prospective sister cities.

We recognize that the main purpose of this goal is to create a city-sourced and city-centered global engagement initiative that's actually meant to mirror what we see in other cities such as San Francisco and Los Angeles by actually having a city agency for global relations.

And it's very, it comes very distraught to our community that, you know, other cities have offices that deal with this but we're the state cap--we're the capital of the fourth largest economy in the world and we have no such office.

I would continue to go on, but I'm actually here because although I wandered in here, the timing could not be any more opportune. A very close friend of mine is working on film, and I know that the culture, media, and sports industry was discussed heavily here. His name is Arnold Chun.

He's relying on the State Legislature because he couldn't get enough community funds to promote a film that discussed Korean American experience during the Korean War.

He is running on a duration because, sadly, as we have with World War II veterans, many veterans and people who survived the scourge of that war are not going to be around long enough pretty soon and he needs the funds and support to get this film and documentation up and running.

And I want to ask the chair if any way and any means he's able to speak with me so I can put him in contact so we can actually have these films, actually utilize Hollywood where it's most effective, not just pursuing and promoting American values and ideals, but also sharing that American Dream and experience for many people who came to the United States because of its efforts abroad and overseas and highlighting that story. Thank you very much.

Thank you. If you want to get a contact, perhaps from our committee secretary. We'll have our committee staff kind of brainstorm with you some available opportunities that are out there for the individual.

Absolutely. Thank you.

Thank you.

Good morning, honorable chair and members. My name is Alexander Rossitto, and I am here on behalf of the California Hotel and Lodging Association, as well as the owners and operators of California's 6,000 hotels and inns. Put simply, California's hotel outlook is one of stagnation.

This is driven in part by operational costs from state and local policy, as well as shifts in demand from domestic and international travelers. To paraphrase the San Diego paper, we're at a point where if you add much more burden or we don't continue to attract the guests, there will be a huge inflection for hotels and tourism overall.

Along--as the Vice Chair noted, and as was mentioned several times today--along California's Central Coast, the iconic Highway 1 has been closed intermittently for years due to various landslides. Most recently, a series of slides culminating in the Regent's Slide, have severely reduced the number of travelers able to explore these destinations.

While the local destination marketing organizations as well as state tourism and transportation authorities have done terrific work to market the region and improve access, the road remains impassable and communities are stagnating and struggling. We need continued and additional support for transportation infrastructure and additional resources to ensure that infrastructure remains operable once restored.

Hotel prices, as was mentioned today, are high across the state to offset, in part, low demand. In fact, occupancy rates are 9% lower statewide than pre-pandemic, and to compensate, room prices are up an average of 8% statewide.

To stay competitive with other markets, hotels rely on tourism promotion and discount programs, which have become increasingly complicated to implement and now face additional hurdles. With occupancy dropping in recent months, hotels are facing a slowdown in activity and market stagnation. We need the flexibility to offer incentives that encourage people to explore the world of their own backyards.

California's hotel industry also relies on reinvestment and property sales, which have slowed drastically in recent years. While interest rates play a role, local tax policy, such as Los Angeles Measure ULA, have increased the cost of transactions such that holding periods are longer, renovations are less extensive, and staffing is reduced.

In short, the total velocity of money is slowed. This is not limited to Los Angeles. Statewide, the average price per room during hotel sales in California dropped by 16.5% in 2025 alone. In San Francisco, the Hyatt Centric Fisherman's Wharf sold in May for less than 50% of what it sold for in 2019.

In all of these cases, the reduced values and volume result in less revenue for local governments, and the hotel market becomes less attractive for guests. We need thoughtful consideration of the lasting consequences of tax policy issues on business ability to reinvest in the properties and to ensure our hotel inventory does not age into irrelevance.

And finally, lingering Covid policies are locking hotels into operations that drive up costs without benefits to guests or employees. For example, in San Francisco, the local Healthy Buildings Ordinance requires hotels to ensure guests don't touch main entrances to decrease the risk of Covid-19 transmission. This policy remains in effect.

In Sacramento, policy is moving, which would, among other things, presume that hotels open for the first time in 2026 are losing workers due to the Covid-19 pandemic. Covid-19 pandemic is over. The policies put in place as a response are impeding hotel recovery and should be allowing to end. In summary, California's tourism industry is facing stagnation.

To avoid it, we need to take action to provide additional support to communities impacted by inoperable infrastructure, ensure hotels have the flexibility to operate in the modern age, and engage in thoughtful review of current tax strategies. Thank you.

Thank you.

Good afternoon, Mr. Chair, and members of the committee. I'm John Lambeth, President and CEO of Civitas. We're a legal and consulting firm that works on funding issues with destinations around the state and actually around the world.

I also serve as chair of California Travel Association's Foundation Board, I'm a past chair of the association, and one of the things we do at the Foundation is significant research about how to keep California competitive, and one of the things we've discovered--I mean, you heard your speakers today talk about how competitive this industry is and what other states are doing--one of the things we've discovered that other states are doing is setting up statewide events funds to help their individual destinations bring those events into the state as opposed to them going to another state.

There are 22 of them now across the country, 11 of those have been in the last three years, and so the other states have woken up and said, we have a financial incentive to get those events into our state as opposed to letting them go to another state, and at California right now, we're at a disadvantage because we do not have that.

And by the way, many of them have been very creative about the way they've done that. They've done tax sharing models where they look at that additional tax base that comes in when they get the event and share that back with the opportunity with the organizations to actually secure the event.

So I wanted to--and mention that today, mostly I wanted to come up and say thank you, thank you for having this, thank you for soliciting all of our comments and for having this discussion with all of us.

Thank you. Thank you for those comments and appreciate the overarching thank yous and I want to appreciate everybody else that was able to participate in today's informational hearing as well as those that showed interest to be able to come as members of the public.

I think that will conclude our hearing and again, everything will be archived on our committee's website, but I wish you well the rest of the summer and we'll keep in touch on future actions that we can do to be helpful.