The World Returns

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The World Returns
An international terminal at LAX.

Three years after the pandemic brought international travel to Los Angeles County to a nearly complete halt, international tourists are finally returning to the region – with one major exception: China.

According to figures from the Los Angeles Tourism and Convention Board, 4.4 million international tourists visited Los Angeles County last year, nearly double the 2.4 million visitors seen in 2021.

While that’s still short of the record 7.4 million international visitors to the county in pre-pandemic 2019, it’s still the most significant recovery toward that goal.

This news is especially welcome by tourism industry executives and businesses that rely heavily on international tourist traffic, for a simple reason: International tourists spend more per capita than their domestic counterparts.

“International tourists both stay more days and spend more each day they are here,” said Adam Burke, the tourism board’s chief executive. “That’s why this is such welcome news after years of international visitors lagging behind domestic tourists as the region has recovered from the pandemic.”

In 2019, Burke noted, international tourists comprised nearly 15% of the total number of visitors to Los Angeles County, but accounted for nearly 32% of the $24.6 billion in direct tourist spending.

Last year, international tourists comprised 9.5% of the total tourism pool, but the $4 billion they spent accounted for roughly 18% of the total tourist spending pie.

Burke said the single biggest factor behind the jump in international tourism last year was the reopening of the United States travel market to international visitors in November 2021. Once that opening came, it took international air carriers several months to ramp up flights; that process was slowed even further by shortages of pilots, personnel and planes.

The first sign of the sharp rebound came in the monthly international air passenger traffic numbers coming out of Los Angeles International Airport. In the first quarter of 2022, the numbers of passengers on international flights started doubling year over year – a trend that continued until the fourth quarter.

For all of 2022, 16.5 million passengers were on international flights heading into or out of LAX, up 107% from 2021.

This total also includes Los Angeles residents and businesspeople heading abroad for pleasure or business trips, which is why the number of actual international tourists as recorded by the Los Angeles Tourism and Convention Board is so much smaller.

Los Angeles World Airports Chief Executive Justin Erbacci said that in addition to the opening of United States borders to international markets, his agency also offered a substantial incentive package to airlines that decided to launch or re-start routes to LAX.

The incentive package included the complete waiving of some landing fees for the first year for routes from certain priority international markets and a discount of 50% for the second year. Los Angeles World Airport also provided up to $200,000 in funds to some carriers to help market the new routes.

Boon to business

This recent surge in international tourism to Los Angeles has provided a welcome boost to local businesses that rely heavily on international tourists.

At West Hollywood-based Bikes and Hikes L.A., an outdoor adventure company, international clientele has traditionally comprised about 40% of the business, said founder and Chief Executive Danny Roman.

The company provides bike tours and hikes around local tourist landmarks in Hollywood, Beverly Hills and on L.A.’s Westside, as well as downtown. During the first 18 months of the pandemic, business plunged across the board, Roman said. “We were basically shut down,” he said.

He said the domestic side of his business came back first, followed by international traffic.

During the last couple of months, Roman said, “Australians have been coming back in droves.” 

Looking forward, Roman said his biggest concern is the overall skyrocketing cost of travel.

Meanwhile, the number of international tourists has also ticked up in recent months at Dream Hollywood Hotel in Hollywood. The hotel, which was founded in 2017, was acquired last fall by Chicago-based Hyatt Hotels Corp.

“For most of the last couple years, our international travelers made up about 5% of our business,” said Vaughn Davis, Dream Hollywood Hotel’s general manager. “But in the last few months, our international travelers have been about 10% of our business.” 

Davis added that his main concern for the summer months is continued geopolitical instability in Ukraine/Eastern Europe and other regions around the globe, as well as continued tensions between the United States and China.

LAWA’s Erbacci also said he’s concerned summer travel may not be as robust as hoped for. But he cited a different reason: constraints from the airlines after the numerous problems that cropped up last year.

“In speaking with airlines, there’s concern about their ability to operate more flights,” Erbacci said. “They are not wanting to build a lot of capacity in the market that they don’t feel they can operate efficiently.”

But Erbacci said those same discussions with airlines lead him to believe that more flights will be added in the fall.

China stumbling back

The degree of the fall recovery may hinge upon what happens with the biggest problem market right now for international travel to the region: China. The country’s zero-tolerance policy for managing the spread of the coronavirus kept many Chinese citizens from going abroad.

But Erbacci said that even after China lifted that policy last year travel between China and the United States remained heavily depressed; Erbacci cited geopolitical tensions between the two countries as a major reason.

In 2019, China was the number two market of origin for international tourists to Los Angeles; its 1.17 million tourists was second only to Mexico’s 1.73 million, according to the tourism and convention board.

But the board’s figures show China falling to No. 9 last year with a mere 110,000 visitors. That’s 1 million fewer visitors than in 2019, representing a 90% drop. No other country has seen a drop of that percentage magnitude extend more than two years beyond the beginning of the pandemic.

The board forecast China to rise back up to No. 3 this year with 460,000 visitors to Los Angeles County, but the ratcheting up of political tensions between China and the United States this year could delay that recovery even further.

And Burke sees another problem with the China market.

“There are nearly 9 million Chinese people right now with international visas allowing them to travel to the U.S.,” Burke said. “But most of those will expire within the next 12 months. And it takes way too long to get an in-person interview at a U.S. embassy or consulate to get those visas renewed.”

The tourism board is one of many lobbying Congress to extend a pandemic measure that waived many of these in-person interview requirements.

“If not a complete waiving of the interview requirement, then we would like to see video interviews allowed,” Burke said. “This would save time and money for people who don’t live near one of our consulates.”

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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