Tourism Development

Overview

The market size of the global tourism sector rose significantly in 2023 compared to the previous year, totaling around $1.9 trillion U.S. dollars according to Statista. Domestic travel within the U.S. lagged 2022 levels for much of the year, with a cooldown of "revenge travel" in the second half of 2023. According to the NTTO, total international visitor arrivals to the U.S. were 66.5 million in 2023, an increase of 31% from 2022 and to a level 84% of the 79.4 million arrivals in 2019. Overall, 2023 was marked by a resilient rebound in global tourism, setting a positive trajectory for continued growth and adaptation to new travel trends in the coming years.

The U.S. domestic airline industry saw substantial growth compared to 2022. Domestic passenger volumes in 2023 approached pre-pandemic levels, a notable increase from 2022 when the industry was still grappling with the aftermath of COVID-19. Palm Springs International Airport (PSP) welcomed 3,237,325 total passengers in 2023, a new annual record.

Travel Trends

U.S. travel advisors reported an influx of new clients and referrals in 2023, the return of regular clients, and a growing focus on luxury travel. Many advisors reported that clients spent more on trips, partly due to higher average costs and an increased interest in luxury experiences. However, some advisors did experience a decline in sales, citing factors such as economic concerns, higher travel costs, and clients taking fewer trips. Additionally, many advisors faced challenges related to time management, dealing with airline schedule changes, and slow responses from suppliers. 

STR Data
Greater Palm Springs showed YOY occupancy level gains in 2023 for both total destination (+1.1%) and Transient (+2.8%). However, transient ADR did decline -1.3% versus a gain of 2.2% for total destination occupancy. Balancing of rates was evident overall as 2023 yielded only two monthly destination ADR records versus 11 monthly records in 2022. Another factor was the large increase in U.S. residents traveling abroad in 2023. The NTTO reported 22% more Americans traveled internationally versus 2022, which is 99% of pre-COVID levels. Our destination’s success in creating demand for the summer and fall seasons is also evident in the past 10 years. From 2003 to 2023, transient occupancy grew 14% in our peak season (Jan-May), 17.5% in summer (Jun-Sep) and 18% in the fall (Oct-Dec). As a reference, our destination’s total occupancy grew 6% in peak season, 5.8% in the summer and 2% in the fall.  

Visa and Vista Data
Reviewing Visa (cardholder count) and Vista (cell phone data tracking) data for our domestic markets, we saw meaningful YOY gains in our regional drive markets as well as from the Northeast and Midwest. Northern California and Pacific Northwest markets have yet to rebound fully, which correlates with lower load factors from those regions on the airlines servicing PSP.

Utilizing the same Visa and Vista data for the international markets, we experienced strong YOY growth from all markets with only the United Kingdom at — or slightly above — same time last year’s levels. Highest visitation gains were from Mexico, Germany, France, Australia, South Korea and Japan. New markets making an appearance in our top 12 source market list included UAE, Indonesia and Malaysia.

Program of Work

Tourism Development continued to support our partners in key source markets across the world. With assistance from our international offices in the U.K., France, Germany, and Australia, we enjoyed personal interactions with over 8,000 clients and welcomed 118 clients in Greater Palm Springs. Our U.S. sales missions touched important direct flight markets such as New York, San Francisco, and Dallas while our attendance at large trade shows such as IPW, World Travel Market, and ITB allowed us to connect with clients representing dozens of source markets. We also joined Visit California and Brand USA on several missions to places such as Japan, Korea, Canada and Germany. We maintained our destination training mindset in 2023 working with Visit California and Brand USA on several training programs as the travel industry continued to build back staff following the staff exodus during the pandemic. Finally, we partnered with dozens of tour operators and travel companies to expand the destination’s awareness with 27 different marketing efforts across multiple geographic regions.

The Tourism Development team was fully staffed in 2023: Gary Orfield, Director; Oleg Nakonechny, Manager (USA, Australia & Mexico); LA-based Julie Kawaguchi, Manager (Asia & Canada); Joanne Ohanesian, Manager (niche and specialty markets, Desert Region liaison); and UK-based Gerry Boyle, Manager (Europe). Our full-time agency representation included Finn Partners for the UK market, Mn’O for the French Market, Msi for the German-speaking markets, and Gate 7 for Australia. We also coordinated project work with Sartha Marketing in India, Aviareps in both China and South Korea, Atlantic Link in Scandinavia, and ConnectWorldWide in Japan.