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Bay Area business travel industry tries to revive after COVID collapse

San Francisco sees sharp decline in business travel
San Francisco sees sharp decline in business travel 02:45

SAN FRANCISCO (KPIX 5) -- There's a push to reignite travel and tourism to the Bay Area after two years of COVID decimating businesses and impacting the industry.

There are already plenty of signs leisurely travel will meet or even surpass pre-pandemic numbers this year. But it's business travel and the hotel industry that are still taking a major hit.

"I work right across from a hotel and very rarely do you see people going in and out of the hotels and you wonder oh they're still in business?" said Annie, who works in downtown San Francisco.

From bellhops, to doormen, to retail shops near hotels, they desperately need more guests packing rooms, to survive and thrive.

Sales have slowly picked up for Gong Cha tea shop on O'Farrell just across the street from Hotel Nikko San Francisco.

James Hatley is trying to see the cup half full instead of empty.

"I've been contacting concierges and talking to them let them know that we're still open," said Hatley.

Revenue is down about 50% despite online and delivery services. Sparse foot traffic, signs of shuttered shops, and an uncertain lease, remain their biggest threat.

"There have been a lot of closures of the retail stores on Powell street so that has definitely affected us," said Hatley.

A new report by the American Hotel and Lodging Association shows Hotels in San Francisco are on pace to see the sharpest decline in business travel revenue of all major U.S. cities, a drop of nearly 70% or nearly $1.7 billion in revenue.

"The majority of the hotels are here in the downtown core so we wanna make sure the downtown core is treated just like any other neighborhood in the city and start filling them," said San Francisco Chamber of Commerce President Rodney Fong.

"You're not seeing many commuters, not seeing a huge convention where you see a huge bunch of people and you wonder why are these people in town? I wonder what convention is here?" said Atina Burtos, who also works in downtown San Francisco.

When travelers spend $100 at a hotel, they spend more than twice that amount in the local community, directly translating to more jobs according to the association.

"Leisure travel this summer maybe the biggest on record this year but the business travel is still down significantly so we're encouraging businesses to come back into the office. Let's get those face-to-face meetings going again and fill the convention center," said Chip Rogers of the American Hotel and Lodging Association.

Experts say business travel, including government and corporate trips, is the hotel industry's largest source of revenue and will take much longer to recover.

For retailers like James, they're still waiting but keenly aware, time is ticking before making a decision to keep pouring, or close up shop.

"I'm not holding my breath right now but hopefully things get better," said Hatley.  

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