The economic impact of San Antonio’s hospitality industry hit a record $19 billion in 2022, even as the sector hasn’t completely recovered pre-pandemic numbers of visitors or jobs.
Almost 35 million people visited the San Antonio metro area last year, according to a study commissioned by a handful of tourism-focused entities, including Visit San Antonio and the San Antonio Hotel & Lodging Association.
That’s shy of the 41 million visitors who spent time here in 2019, but that smaller pool still managed to generate 10% more revenue than the pre-pandemic peak, and contribute almost $262 million in tax and other revenue to the City of San Antonio.
Similarly, while the number of jobs in tourism-related industries hasn’t completely rebounded, payroll hit $4.1 billion, surpassing the previous high of $3.6 billion in 2019.
Hospitality’s record-high economic impact is a reminder that tourism remains a mainstay of San Antonio’s economy, said Richard V. Butler, economics professor emeritus at Trinity University, who authored the study with Mary E. Stefl, professor emerita in health care administration. Only manufacturing, health care and biosciences, and the military generate higher revenue, Butler said.
“It’s still one of the most important industries in San Antonio, and not just for its immediate economic impact,” he told the San Antonio Report. “San Antonians enjoy a better quality of life. … Think about how many fewer restaurants and museums and attractions and so on we’d have if we didn’t have the visitors to patronize them.”
Yet the study also reflects the relatively low-paying nature of many of the jobs in hospitality. Roughly 140,000 employees divvied up the $4.1 billion in direct wages; in comparison, health care and biosciences, which generated an estimated $44 billion in economic impact in 2021, paid about $11 billion in wages to roughly 180,000 employees.
Wage growth has risen 15% in hospitality since 2019, Butler noted, as employers have raised pay to help rebuild their workforce following the pandemic. Also, many of the jobs in the industry are part time, he said.
“There are lots of people in the area who need a part-time job, so that’s a good thing,” he said. “And there is a lot more upward mobility [in hospitality] than people think.”
Hospitality employs about 1 in every 8 workers in San Antonio’s metro area, while health care and biosciences employs nearly 1 in 5.
The study divided the hospitality industry into four sectors: transportation and travel, lodging and other accommodations, restaurants and other eating/drinking establishments, and entertainment and recreation activities.
The eating and drinking category alone made up $10 billion, or just over 52% of the total. That’s higher than its previous three-year average of about 50%, the authors wrote, “by a large margin the highest [share] ever.”
Marc Anderson, president and CEO of Visit San Antonio, called news of the record-breaking economic impact “immensely gratifying,” but said the industry still needs to remain laser-focused on bringing visitor numbers and hotel occupancy rates back to pre-pandemic levels.
“What’s most gratifying for us is that the strategies we put into place in 2021 … to broaden the reach of our marketing efforts” is paying off, he said. Visit San Antonio’s focus includes the 41 million travelers who can drive to San Antonio, as well as “key domestic cities” and international travelers.
The latter group, Anderson said, has not rebounded as strongly as leisure travel and conventions.
Because visitors bring “new dollars” into San Antonio, their spending has a multiplier effect, the study found, with each dollar spent generating another dollar of revenue for the local economy.
That boon extends to local government coffers. Visitors pay the lion’s share of hotel occupancy and rental car taxes, which made up more than a third of the $262 million collected by the city last year. Bexar County collected $31 million in visitor-related tax revenue in 2022.
The hospitality industry also generates tax revenue for other municipalities in the region and for entities such as school districts, University Health System and VIA Metropolitan Transit.
“Without the tax payments from the hospitality industry, the city, county and state would either have to reduce services or find additional resources to balance their respective budgets,” the study’s authors wrote.
Zooming out, the study also looked at hospitality’s impact compared to a decade ago.
The industry has grown by 64% since 2012, an “impressive performance” for a decade that included a global pandemic, the authors wrote. Its economic impact that year was $11.6 billion. Employment grew 23% during the same 10-year time period.
The sector’s continued strong growth, especially in the wake of the pandemic, “has us cautiously optimistic” that numbers will have completely rebounded in 2024, Anderson said. “But there’s still so much more we need to do.”
