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Fewer Tourists Leaving Hearts in S.F.


SAN FRANCISCO — Squinting through the window of his 82-year-old Italian restaurant in the historic heart of San Francisco, Paul Mechetti longingly remembers what he no longer sees.

"We've always had them ... lines of them out the door and down the sidewalk, shopping bags stuffed full," says Mechetti, who has owned the family-run Gold Spike Restaurant in North Beach for 32 years. He squints harder, as if the tourists he speaks of will suddenly reappear on the unusually quiet street. "There's no way it's summertime out there. I don't know what it is."

For a city that has had to do little more than exist to propel a booming $8-billion tourism industry, the slowdown pressing on hotels and businesses this summer is unfamiliar and worrisome, leaving many wondering how much longer such a stubborn drought will last. The economic downturn, business travel cutbacks since Sept. 11 and the dramatic tech bust that walloped the Bay Area have all formed what industry experts are calling "the perfect storm" for upsetting a city that has been something of a spoiled child in the tourism industry.

The fallout--which could cost $1.5 billion to $2 billion in visitor spending this year compared with the peak in 2000--has left city officials and businesses hunting for ways to attract more regional visitors, a novel idea.

The goal, they say, is to recast, at least temporarily, San Francisco's sophisticated image--the average age of out-of-town visitors is 46--as a more family-oriented destination. Carnivals and wine tastings, concerts and international food fairs are all being promoted in force.

"They've never had to work hard at getting people to visit and spend, because it all just sort of came to them," said Jeffrey Dallas, an industry consultant for Ernst & Young. "But suddenly they're not the bargain destination people are looking for. They're not the place to grow dot-coms anymore. They're struggling, and they're not used to it."

While other California tourist destinations have been showing signs of recovery in higher hotel occupancy rates and visitor numbers--with some, such as San Diego, already surpassing last year's figures--San Francisco is by far rebounding the slowest. Arrivals to San Francisco International Airport were down 17%, or about 2 million people, for the year. Through May, hotels were slightly more than half full, compared with nearly three-quarters occupied during the same time last year.

In Los Angeles, hotels are about 70% occupied, and although local tourism officials expect fewer visitors to Southern California this year than last, they no longer worry about the double-digit drop that was forecast in the weeks after Sept. 11.

"It just about drives you crazy," said John Marks, president of the San Francisco Convention & Visitors Bureau. "When you're used to being on a rocket ship, this feels like a moped."

Marks and others in the tourism industry recall the heady times of just two summers ago, when the city's 34,000 hotel rooms were sold out and the yearly occupancy rate was among the highest in the nation, second only to New York's. In 2000, convention business set a record, international tourism was up, and the dot-com business was robust enough to send 30-year-olds splurging on $1,500 bottles of wine at dinner, Marks said.

Things were so good, in fact, that Marks was often told by colleagues in other cities that he had the easiest job in the industry. He didn't argue.

"I knew I had a good gig," Marks said. "This city has always been on autopilot when it comes to having the best platform for visitors, meaning equally strong business, convention and leisure travelers."

Within a year, though, the economy began to sour, dot-coms began to implode, and it became clear that the city's tourism industry would suffer the most. Then came Sept. 11, and "it all went down hard," said Dallas, the Ernst & Young consultant. "And it has been on a downward spiral since."


New Tourist Markets

To get through the slump, San Francisco is trying to lure more regional visitors. It's a market the city long took for granted, said Norman Williams, spokesman for the California Technology, Trade and Commerce Agency. With 80% of the city's visitors arriving by air, San Francisco has not had to concern itself much with attracting guests from the 100-mile "drive-in" market.

Tourism officials have launched promotions for restaurants, crab fests, street festivals and weekend getaways to draw more Californians for shorter stays. A first-ever telephone campaign targeting residents in Sacramento and the Central Valley last fall was duplicated in the spring.

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