Dec. 31 marked the end of another tough year for Santa Monica’s retail and restaurant sectors, but with visitor numbers surging and the Super Bowl on the horizon, early indicators give reason to be optimistic for 2022.
Santa Monica Travel & Tourism (SMTT) reported that the local hotel occupancy rate in December averaged 65.4%, an increase of more than three times from the December 2020 rate, but still below the 72% occupancy rate seen in December 2019. The average daily hotel room rate for December was $346, up from the 2020 average which was in the low $200s, SMTT reported.
Sensors along the Third Street Promenade that help the local business district measure foot traffic on the pedestrian lane showed promising numbers in December, despite it being one of the busiest holiday seasons. rainiest on record. The automated system includes an algorithm to prevent a pedestrian from being counted multiple times, according to Mackenzie Carter of Downtown Santa Monica (DTSM), but even so the numbers are used more as a general indicator than a solid metric like the rock measuring economic success.
“It really gives us a general idea of how many people are walking down the street at any given time,” Carter, director of marketing and communications at DTSM, told the Daily Press recently. “Now that we’ve had it for a few years, it allows us to compare year on year.”
Recent figures showed that around 288,000 pedestrians visited the promenade during the week from December 27 to January 27. 2 – an increase of 189% compared to dismal 2020 figures for the same period. The New Year holiday weekend from December 31 to January 31. 2 saw 88,768 pedestrians counted, more than 7,000 more than was visited the same weekend in December 2019, before COVID-19 hit.
In fact, December’s daily average of 59,697 pedestrians was a fraction higher than the numbers counted in December 2019 (when 56,883 pedestrians were counted each day, on average); according to information provided by the DTSM, this is the first month that pedestrian count averages are higher than a pre-covid month.
“We had a lot of rain, but despite that, we had a really good amount of foot traffic,” Carter said.
How these numbers translate into business revenue is a little harder to quantify.
While an increase in foot traffic generally correlates with a similar increase in commercial traffic, lifestyle changes from COVID-19 have made this correlation less reliable.
“For example, during COVID, a lot of people were walking around, and so we didn’t really see that correlation – but in non-pandemic times, we definitely saw a correlation between the number of people on the street and the dollars of the sales tax that covers the city,” Carter explained.
Carter and Santa Monica Economic Development Officer Jennifer Taylor both said that while pedestrian count metrics are a useful metric, sales tax data is necessary to gauge the true health of the city. local economy. These figures were not expected for several weeks.
Taylor predicted a “slow but steady road” that would see the city budget “back on track” within the next three to five years; current trends indicate that the city has remained on track, even despite the virus and weather-related obstacles.
Both Taylor and Carter pointed to the city’s interim zoning ordinance, passed in 2020, which has helped bars and restaurants stay open even amid three major COVID-19 surges seen in the past 12 months. .
“Many of our restaurants are permitted in some cases to double their capacity in terms of the number of customers they can potentially serve and continue to serve those who wish to be outside as much as possible,” he said. said Taylor, adding that there were not only restaurants, but also salons, studios and fitness centers that could move outdoors.
“It’s amazing to see the variety of businesses that use the Santa Monica Outdoors program,” Taylor continued. “So I think that was really key. Also, the fact that our city’s leadership, the Council, supported the expansion of fee waivers at Santa Monica Outdoors, was really important. Basically, this means that their temporary use permit has no permit fees.
Programs like this have provided a lifeline for businesses along Main Street, according to Hunter Hall, executive director of Main Street Santa Monica.
In addition to the expansion of outdoor service, Hall cited California’s liquor control (ABV) offering flexibility for outdoor liquor service as a major contributor to restaurant revenue.
“When you get an ABC license or a liquor license, you have to submit a floor plan and you are only allowed to serve alcohol in that area. So, you know, before COVID, a normal restaurant couldn’t just decide to take over their parking lot and start serving alcohol,” Hall described. “So the ABC temporarily changing that rule allowed them that, and they’ve grown, which is great.”
Another adaptation, Hall said, has been the expansion of dine-in offerings, with restaurants shifting to large-scale take-out operations.
Those changes, combined with government loan programs and a moratorium on evictions, helped prevent Santa Monica’s service economy from collapsing over the past two years, Hall said — but the situation was far from over. be stable.
“It doesn’t really tell the whole story,” Hall said. “And the whole story is really that despite the fact that a lot of these restaurants are still open, technically they are on life support. You know, they’re probably one bill away from closing.
Carter said while downtown has seen its share of closures over the past two years, vacancies on the Promenade, which peaked at around 45%, have fallen to 25% with recent rental agreements. , including a new food hall to open in December and a new tattoo parlor – the first on the Promenade – set to open soon.
But with restaurant owners continuing to take on debt, Hall predicted more local restaurants on Main Street could file for bankruptcy in 2022, even as the economy picks up.
Compounding these constraints is the tight labor market, which both Hall and Carter noted as a barrier for local businesses.
“Right now, one of the biggest problems all over the United States is, you know, people calling themselves sick or the ‘big quit.’ People are just operating with really skinny staff,” Carter said. “I think it could really affect business operations going forward, if we don’t see people coming back to work.”
Hall said he had empathy for workers who quit during the pandemic, remarking that “let’s be honest, sometimes the public is the worst,” especially given the current political divide happening in the country.
Hall said the labor market shake-up was happening across industries, not just food and retail, but called it a “big shakeup” rather than a “big quit.” He said Santa Monica restaurants have remained competitive in the job market by offering benefits such as paid sick leave to employees that restaurants in other cities don’t offer.
While the ongoing virus outbreak due to the omicron variant of COVID-19 has left visitors and locals questioning themselves, the winter surge correlates with Santa Monica’s slowest retail season, a Hall said. Both Taylor and Carter added that outdoor dining meant there were options for people who would otherwise feel unsafe due to the new, highly transmissible variant.
While the first quarter of the calendar year can be a downturn for the local economy, the first quarter of this year has a bright spot for business owners: the Super Bowl, which was scheduled to take place in Inglewood in February.
Although SMTT was unable to provide reservation statistics or an expected hotel occupancy rate for Super Bowl weekend, Carter and Taylor predicted that the game and associated events would attract visitors for help stimulate the local economy.
During the week of the big game, Santa Monica is expected to host a number of events, including a carnival-style “tailgate” on the boardwalk, a charity fashion show, and the official broadcast of the pre-game show. NBC, which will run on The Pier. And even visitors who don’t attend a paid local event will be more likely to spend money.
“Not only will people be attending events, but they’ll also be staying in Santa Monica while they’re here for the Super Bowl,” Carter said. “And so, we will just have this foot traffic and then people wanting to go out and have a bite to eat or hang out in the park or go down to the beach. I think we’re only going to see general foot traffic for these reasons.
SMTT has provided a guide to watching the Super Bowl in town, available at santamonica.com/super-bowl.