Annual Tourism Report 2008

Transcription

1 EDB Sonoma County Economic Development Board Tourism Annual Tourism Report 2008 Economic Development Board 401 College Avenue Suite D Santa Rosa CA

2 Table of Contents 1 Executive Summary Economy.com 2 Economy.com Tourism Report Tourism Indicators 7 Destination Spending 8 Destination Spending Breakdown 9 Industry Employment 10 Lodging & Hospitality Assessment 11 Tourism Generated Taxes Sonoma County Visitor Survey 12 Visitor Survey Summary 13 Visitor Demographics, Motivations & Influences 14 Visitor Interests & Publications Read Sonoma County Tourism Industry Survey 15 Tourism Industry Survey Summary 16 Survey Responder Demographics 17 Visitor Origins & Traveler Type 18 Expansion, Industry Confidence/Outlook & Green Practices 19 Local Government Assistance, Promotional Assistance & Marketing 20 Attractions, Potential & Reputation 21 Market Opportunities, Culinary Program & Historical Trail/Program 22 Marketing Program Effectiveness & Customer Service Awards Program 23 Methodology 24 Acknowledgements

3 2008 Annual Tourism Report June 2008 The Sonoma County Economic Development Board (EDB), in partnership with the Sonoma County Tourism Bureau (SCTB), is pleased to bring you the 2008 Annual Tourism Report. The 2008 Annual Tourism report contains four sections, integrating findings from our research partner, Moody s Economy.com, providing an update on current industry vitality, and highlighting results from our inaugural visitor demographic survey and Annual Tourism Industry survey. Moody s Economy.com is a leader in economic research and provides key quantitative and qualitative analysis on Sonoma County s tourism industry. Key findings from Moody s Economy.com 2008 Annual Tourism Update include: Increased air service to Sonoma County bodes well for the tourism industry. The depreciation of the dollar against many major currencies will benefit the area. Since travel to the U.S. will be less expensive for foreigners, Sonoma County is likely to continue to see increased travel by international visitors. In the long run profitability in the county should remain strong, as demand for wine continues to grow and baby boomers retire, creating a firm base for winery-related visits. Each year the EDB conducts an annual Tourism Industry Survey of Sonoma County tourism business owners and executives. This survey focuses on complete industry strength with an emphasis on industry confidence and opportunities. Key findings from 2008 Annual Tourism Industry Survey include: Sonoma County had the second highest destination spending growth rate in the state for 2006, substantially outpacing regional competitors- Napa and Marin. There are many new opportunities for Sonoma County s Tourism industry. Strong survey support was shown for culinary programs, such as a Restaurant Week, a countywide customer service awards program, and heritage or historical programs. The majority of reporting tourism businesses have a positive outlook for the coming year, though there is concern about the effect of the falling dollar. Sonoma County s tourism industry has performed very well over the past year. Occupancy rates at area hotels averaged more than 64% for the year. Thank you for your continued interest in the Economic Development Board s research. As always, if you have any questions, please feel free to contact us at Sincerely, All information contained within this report was obtained from sources believed to be accurate, but the Sonoma County Tourism Bureau (SCTB) and the Economic Development Board (EDB) do not guarantee that it is accurate or complete. The most recent published data was included in this report, and where appropriate, that data has been adjusted using the U.S. Bureau of Labor Statistics Consumer Price Index. This report is intended for informational purposes only and does not represent an endorsement of any proposed project by the SCTB or EDB or any of their employees, affliates, or members. 1

4 Moody s Economy.com Recent Trends & Macro Drivers Recent Trends The Sonoma County tourism industry has moderated recently.the slowing U.S. economy is undoubtedly hampering visitor arrivals to Sonoma, as are rising gasoline prices and the continued housing market correction. Hiring in the county s leisure and hospitality industry has slowed throughout the past year and the level of industry employment is now below that of a year ago. Industry job growth has also underperformed compared to the state and national average. At the same time, tourism-related employment has grown faster in neighboring Napa Valley, suggesting that demand for the type of experience unique to the wine country has held up in the face of weakening economic conditions in the broader economy. Occupancy rates at nearby San Francisco area hotels have averaged close to 75% over the past year, an improvement from one year ago, suggesting that Sonoma County should gain from spillover demand. Recently improved air service to Sonoma County supports the long-term vitality of the local tourism industry. Horizon Air now provides daily nonstop service to Las Vegas, which is the fourth destination to be served nonstop by the airline from Charles M. Schulz-Sonoma County Airport. Horizon Air began serving Sonoma County one year ago, with flights to Los Angeles and Seattle. Late last year, the airline added a daily nonstop flight to Portland, and earlier this year the company announced that it will add a second flight between Santa Rosa and Seattle to better accommodate strong demand.the increased air service is a sign of economic vitality in Sonoma County and bodes well for the tourism industry in the near term as the area is now more easily accessible from throughout the West.The additional new destinations can also serve as new gateways for travelers making connections to and from the Midwest and the East Coast. Macro Drivers By most measures, the U.S. economy is in or near recession. Household finances are being squeezed from all sides. House prices are falling, gasoline prices are rising and real income growth has been dwindling. As a result, consumers are facing greater difficulty in funding necessities, not to mention luxuries including leisure travel. Recent data make it clear that the economy is struggling but it is still unclear whether the economy is in a full-blown recession. Real GDP growth in the first quarter was a meager, but positive, 0.9%. Consumer spending posted its weakest gain since the mid-1990s, and business investment fell. Sharp declines in confidence suggest that consumers and businesses are both likely to cut spending in the near term. For the average U.S. household, these are particularly difficult times. Household net worth has fallen some 1 over the past year because of the decline in stock and house prices, and real house 2 Stronger than average lodging demand in the nearby San Francisco area is a boon to Sonoma County as well. Since Sonoma County is only a short drive from the city, it stands to gain from tourism in the Bay Area as a whole. Hotel occupancy rates and hotel revenues in the San Francisco area are considerably higher than the national average. While occupancy rates have slipped in California and the U.S. as a whole, demand is improving in Northern California. Sustained convention and business travel is helping to support lodging demand in the area, some of which is likely to spill over into Sonoma County. hold incomes are also off because of the loss of jobs, slower wage growth, and rising food and energy prices. Consumers have remained very cautious in their spending, owing to the ongoing high level of uncertainty surrounding the outlooks for the economy and their incomes. Even in the case of nondurables, increases in nominal spending on nondurable goods have gone exclusively to meet price increases in the last three months, as real spending has been essentially flat since the begin- ning of this year. This leaves much less left over to fund leisure activities. Over the past year, real spending has increased 2%, not greatly different from the 1.6% year-ago gain in February. These figures are among the lowest since February In fact, the first quarter annualized rate was just 1%, the weakest growth since the 2001 recession. Continued weakness in the U.S. dollar is at least helping to boost international tourism. The dollar is off almost 25% on a real broad trade- weighted basis since peaking in early The real broad trade-weighted dollar is expected to fall another 5% through The weakness has been most pronounced against the euro and British pound, as the European Central Bank continues to hold policy unchanged.

5 Moody s Economy.com Macro Drivers Cont. & Industry Dirvers Macro Drivers-Continued: Rising gasoline prices are likely to limit many travel plans as both car and air travel are set to become even more expensive during the peak summer travel months. Oil prices remain stubbornly high, with the price of a barrel of West Texas Intermediate currently trading at well over $100 per barrel, up from as low as $50 as recently as late Retail gasoline prices are now rising along with oil prices and are at a record high approaching $4 per gallon. Oil prices are expected to remain near current levels through the summer, sliding to below $100 per barrel by the end of this year and bottoming out at just under $60 per barrel early in the next decade. The latest data on credit conditions show weakness continued in the first quarter of 2008, adding further downside pressures to the outlook for leisure travel in the near term. At the end of the first quarter, the delinquency rate on household liabilities surged. Mortgage delinquency rates are well above their highs during the last recession and continue to soar. Fortunately, there is some upside potential. Fiscal stimulus, including about $100 billion in tax rebate checks, began to flow in early May. Moody s Economy.com expects about two-thirds of that money to be spent in the following nine months. In addition, the impact of monetary stimulus, which operates with a considerable lag, will increase as the year progresses. Combined with further policy action, which is likely, the economy and consumer spending should begin to revive in the second half of the year, boding well for Sonoma s tourism industry. Industry Drivers: Spending on tourism-related commodities has remained resilient nationwide, growing by a robust 7% in the fourth quarter of 2007 from a year ago to over $7.5 billion on a seasonally adjusted annualized basis.the area s vineyards are a large draw for Sonoma s tourism industry, so the wine industry s performance can be an important barometer. Nationwide consumer spending on wine grew at a solid pace through the first half of 2007, but, more recently, weakness in the national economy has taken a toll on consumer spending. Consumer spending on wine has been more stable than it has been for other nondurable goods, but it is still growing at its weakest pace in five years. Despite the weak conditions in the broader national economy currently, the leisure and hospitality industry has remained optimistic. As a result, Sonoma County approved 32 new lodging property applications as of the third quarter of 2007.This will add over 1,000 new hotel rooms to the county s total.two-thirds of the expansions are expected to be completed by the end of this year, according to the Sonoma County Permit and Resource Management Depatment. The dollar s continued decline against most major currencies is helping to increase international travel to the U.S., including the Bay Area. While overseas travel to the U.S. has yet to rebound from the downturn that began in 2001, Canadian visitation is increasing at a robust rate and accounts for the majority of international visitation to the U.S. Looking ahead, continued dollar weakness will put upward pressure on other currencies. The dollar is expected to slip even further this year, thus providing continued support for international visitation, and helping to at least partly offset weaker economic conditions at home. Air travel in the U.S. has continued to rise, despite rising fuel costs. Air travel, as measured by the number of passenger miles flown, increased by over 3% in 2007 from San Francisco International Airport reported a 9% increase in passenger traffic through the first quarter of Sonoma County s proximity to the metro area means it is very likely that it has benefited as well. Locally, at the Sonoma County Airport, Horizon Air witnessed a 23% increase in passenger volume from the third to fourth quarter of 2007, boosted by the new service to Portland. The tourism industry has benefited from stronger international tourism, which has been boosted by the weakness of the U.S. dollar. Overseas visits to the U.S. jumped 1 in 2007, and the trend appears to be accelerating this year. Canadians and Mexicans have increased their visitation to the U.S. In particular, Canadian visitation was up 18% over the year as of February according to the latest Statistics Canada figures, as Canadians took advantage of virtual parity between the Canadian and the U.S. dollars. Finally, the potential for expansion in the local gaming industry in coming years would further attract visitors from the surrounding region. 3

6 Moody s Economy.com Pricing, Operating expenses & Profitability Pricing Pricing power has remained very strong in the nearby Bay Area, as measured by San Francisco s average daily hotel room rate. In the first quarter of 2008, the average daily rate in San Francisco grew by nearly 9% compared to only a 6% increase in California as a whole and 5.5% growth in the U.S. Sonoma County is sure to witness spillover benefits from increased visitation to the area. In fact, the area has witnessed improving room rate growth over the past two quarters, while the state and nation have seen the average daily rate fall on a year-ago basis. Strong rate growth in the San Francisco area has resulted in substantial growth in revenue per available room in excess of 12% during the quarter, compared to only about 5% in the state and nation as a whole. Rising occupancy rates support the industry s pricing power. The improvement in hotel occupancy accelerated over the past year from only a single percentage point increase early in 2007 to nearly 3-percentage point gains in the first quarter of this year. In contrast, California and the U.S. have watched occupancy rates fall in recent months. The outlook for Sonoma s pricing appears sound, given the continued strong demand for leisure, the growing popularity of wine, and the continued depreciation of the dollar against major currencies.the weaker dollar will help to draw international travelers who will find visiting Sonoma County less expensive, and will be more likely to accept elevated room rates. There will be some offset, however, from domestic visitors chafing under higher gasoline rices and air fares. Sonoma has traditionally had the advantage of being considered a more affordable alternative to neighboring Napa Valley, but as its popularity grows, Sonoma is finding itself able to sustain more aggressive pricing. Operating Expenses Rising operating costs remain a constant concern for the tourism industry. Hotel operating costs are expected to rise 4% in the nation as a whole in 2008, according to PKF Hospitality Research. Since the hotel industry is more labor intensive than many other industries, it is very sensitive to wage pressures. Labor costs are estimated to account for 44% of total operating expenses. Wages and salaries in Sonoma s leisure and hospitality industry increased at a faster pace over the past year than in the previous two years. However, the rising costs have been partly offset as hiring slowed in the latter half of As of the first quarter of 2008, the number of industry jobs was slightly below that of a year ago. Higher per-employee labor costs could be partly to blame for the end of job growth in the past several months. However, the rising unemployment rate is likely to ease wage pressures somewhat as the labor market loosens. Sonoma County s tourism-related employment has stagnated after relatively stable growth in recent years. Weaker hiring locally is consistent with the industry in the state as a whole, as weakness in the economy, driven by the housing market downturn, dampens expenditures on leisure activities. As homeowners watch the value of their homes depreciate, they are left with less wealth and are increasingly likely to forestall vacation plans. Nonetheless, the industry retains healthy fundamentals for the long term, and industry growth seems likely to pick up again with the expected addition of more hotels this year and next. Other fixed expenses include property taxes, utilities, management fees, franchise royalties and insurance. Many of these expenses have grown the most and are often more difficult to control than labor costs. Profitability Nationwide profitability is expected to be above 8% this year in the nation s hotel industry, according to PKF Hospitality Research. In the long run, profitability in the county should remain strong, as demand for wine continues to grow, creating a firm base for winery-related visits. In addition, Sonoma County has successfully diversified the attractions that it offers, which will help to ensure a steady flow of profits from a variety of visitors with a wide array of inter- ests. The weak dollar will help to offset some of the slack in domestic demand in the near term by attracting foreign visitors who tend to spend more per day than domestic visitors. 4

7 Moody s Economy.com Long-term Outlook, Upside & Downside Risks Long-Term Outlook The long-term outlook for Sonoma County s tourism industry is positive. The region is growing in recognition, and its proximity to Bay Area attractions will continue to support tourist traffic. Moreover, the continued strong popularity of wine and the wine-related culture, and its expanding link between local food offerings and health and wellness activities, underpin the positive fundamental outlook for the industry. Demographic trends suggest healthy longer-term prospects as well. Baby boomers are nearing retirement age with well-developed tastes for travel and recreation, in addition to the discretionary income to fund these tastes. Wine consumption is growing among all generational segments, according to MKF Wine Business Advisors. Baby boomers are leading the way, but interest in wine is growing among not only women but also men and nearly all ethnic groups. Thus, as baby boomers retire in the years to come, they are expected to generate a great deal of travel to the area. Upside Risks The main near-term upside risks to the outlook for tourism come from the ongoing federal policy responses to the weakening economy. Greater-than-expected stimulus from a combination of additional monetary and fiscal policies could further support the economy, lifting growth and household balance sheets to better than expected positions, especially in the second half of this year. A large portion of the visitors who come to Sonoma County have traditionally been from higher-income households, and are therefore less sensitive to the housing market downturn and the slowdown in the national economy. Demand for the high-end tourism that Sonoma County is able to provide through food, wine, golf, spas, and other wellness activities could remain stronger than expected, if the structure of the tourism market remains heavily weighted toward the upper-income bracket. Another potentially beneficial risk over the long term would be the wine industry s success in broadening its demographic market and attracting a more diverse group of tourists. This would increase the number of visitors that are interested in visiting wineries and vineyards in Sonoma County, and would bring residual revenues to all other tourismrelated businesses in the area. A final upside risk that would boost visitor arrivals is the potential for expanded gaming venues with additional hotel and entertainment offerings. Wage and salary income per worker in Sonoma s leisure and hospitality industry grew at a slower pace during the past year, which has helped to alleviate operating expenses for tourism-related businesses. The growth rate of 3.4% in average wages and salaries was not far below that of the previous year, but it is considerably weaker than that of all industries in the county taken as a whole. Because wages and salaries are such a large share of operating expenses, about 44% for hotels, the industry could begin to see an upturn in hiring in response to the slower wage growth. Downside Risks The greatest downside risk comes from high energy prices, which act like a tax on consumers that could absorb much of the increased spending expected from this year s tax rebate checks, negating at least a portion of the stimulus. Higher than expected energy prices could produce a longer, deeper recession than the Moody s Economy.com baseline forecast, with a larger decline in spending. The possibility of a more severe credit squeeze, making funds unavailable for even creditworthy consumers and employers, is another critical worry. The resulting lack of business borrowing would impede investment spending and hiring, while further reductions in credit availability for consumers would significantly impede spending. Arnold Slesers May 2008 Moody s Economy.com, Inc. 5

8 Tourism Industry Indicators Sonoma County Tourism Industry Indicators The Tourism Industry Indicator section is based on data prepared for the California Travel and Tourism Commission by Dean Runyan and Associates, industry data from Smith Travel Research, and Sonoma County s Transient Occupancy Tax receipts. Where applicable the data and graphs in this section have been adjusted for inflation using the US Bureau of Labor and Statistics Consumer Price Index. In this section the Marin and Napa are used as comparison counties because of their similarity of offerings and geographical location. Key findings include: Sonoma County has the second-highest destination spending growth in the State in In 2007 Sonoma County s average daily rate climbed 11.3%, to a record high of $127. Sonoma County s Transient Occupancy Tax receipts totaled $21.36 million in 2007 after adjusting for inflation. 6

9 Destination Spending Total, Per Capita & Growth Destination spending is the total amount spent by visitors in Sonoma County. This indicator includes all visitor spending for accommodations, wine activities, retail, and other tourismrelated purchases. Sonoma County had the second-highest destination spending growth rate in the state for 2006, substantially outpacing regional competitors- Napa and Marin. The most recent inflation-adjusted figures show Sonoma County s destination spending up 15% from $1.14 billion to a record high of $1.32 billion in s 15% increase is significantly larger than Sonoma County s 2.24% average annual real growth rate. In 2006 Sonoma County s annual growth surpassed Marin (13.17%), Napa (14.16%), and the statewide average (2.24%). $1,500 $1,200 $900 $600 $300 Destination Spending, (Millions of 2008 $) Total destination spending in Marin, Napa and Sonoma totaled $2.96 billion in 2006, an inflation-adjusted increase of 14.41%. Sonoma County continues to generate the largest portion of North Bay destination spending, nearly 45% ($1.32 billion) of the North Bay total. Marin and Napa generate 23% and 32%, respectively. $0 Marin Napa Sonoma In 2006 Sonoma County generated $2,598 per capita in destination spending. While this figure is slightly larger than Marin s $2,571 per capita and the statewide average of $2,516 per capita, it is still considerably lower than Napa s $6,660 per capita figure. Source: California Travel Impacts by County, 2007 Preliminary State Estimates. Prepared for the California Travel & Tourism Commission by Dean Runyan and Associates, March Adjusted for Inflation using the US Bureau of Labor Statistics Consumer Price Index. 2 Destination Spending Annual Real Growth Rates, % Destination Spending Per Capita, 2006 (2008 $) 1 $7,000 5% $6,000 $5,000 $4,000-5% $3,000 $2,000-1 California Marin Napa Sonoma $1, $0 California Marin Napa Sonoma Source: California Travel Impacts by County, 2007 Preliminary State Estimates. Prepared for the California Travel & Tourism Commission by Dean Runyan and Associates, March Adjusted for Inflation using the US Bureau of Labor Statistics Consumer Price Index. Source: California Travel Impacts by County, 2007 Preliminary State Estimates. Prepared for the California Travel & Tourism Commission by Dean Runyan and Associates, March Adjusted for Inflation using the US Bureau of Labor Statistics Consumer Price Index. 7

10 Destination Spending Breakdown AS in previous years, the overall distribution of commodity- based visitor spending in Sonoma County is comparable to other North Bay counties and the statewide average. However, there are several areas where Sonoma County appears to be somewhat unique. Visitors to Sonoma County devote a slightly smaller share of their spending to accommodations 17.9% of all spending, compared to 20.5% in Marin and 23.3% in Napa. Compared to California, Sonoma County visitors spend a larger share on accommodations, food and beverage services, food stores, arts/entertainment, and recreation, and retail sales. In comparison with the State and other North Bay counties, a sharply smaller share of visitor spending in Sonoma County comes from visitors who are staying in a hotel or motel (45.1% compared to 53.3%, 66.1% and 52.9% for the Marin, Napa and the State respectively). Instead, a large share of Sonoma County visitor spending is received from day travelers (31.2%), compared to 22.2% for Marin, 26.4% for Napa, and 24.9% for the State. Although it represents a smaller share of spending, 8.6% of a Sonoma County visitor spending comes from visitors staying in vacation homes, compared to 4.8%, 2.2% and 4.4% for Marin, Napa and the State, respectively. Distribution of Visitor Spending 3 by Commodity, % 2 15% 1 5% Accomodations Food & Bev. Services Food Stores Ground Trans. & Fuel Arts, Ent. & Recreation Retail Sales Air Trans. California Marin Napa Sonoma Source: California Travel Impacts by County, 2007 Preliminary State Estimates. Prepared for the California Travel & Tourism Commission by Dean Runyan and Associates, March Distribution of Visitor Spending by Accommodation, Hotel/ Motel Private Campground Public Campground Private Home Vacation Home Day Travel California Marin Napa Sonoma Source: California Travel Impacts by County, 2007 Preliminary State Estimates. Prepared for the California Travel & Tourism Commission by Dean Runyan and Associates, March

11 Industry Employment Industry employment, Earnings, # of Jobs, & Growth Travel spending in Sonoma County has a significant impact on the local economy, contributing more than $381 million in annual wages in ,000 Employment Generated by Destination Spending, (# Of Jobs) With 15,900 jobs generated by tourist destination spending, Sonoma County ranks #1 against comparison North Bay counties- Napa: 10,530 jobs and Marin: 6,750 jobs. Sonoma County s 2006 job figures show a 2.8% increase over As a result of Sonoma County s high destination spending, employment levels in the tourism industry are greater than in Napa or Marin County. Sonoma County s tourism industry earnings per-employee from travel spending have increased 4.1%, after adjusting for inflation. However, Sonoma County s tourism industry earnings per employee are still the lowest of the North Bay comparison counties and below the State average. # Of Jobs 12,000 8,000 4,000 0 Marin Napa Sonoma Source: California Travel Impacts by County, 2007 Preliminary State Estimates. Prepared for the California Travel & Tourism Commission by Dean Runyan and Associates, March This 4.1% growth in employee earnings is helping Sonoma County reduce its historical gap in per-employee earnings. In 1998, Sonoma County s earnings per employee were less than 59% of Marin s, and less than 8 of Napa County s. In 2006, Sonoma County s earnings per employee were more than 61.4% of Marin s and 82.2% of Napa County s. Distribution of employment within Sonoma County s tourism industry is similar to previous years, with 52% in accommodations or food service, 37.74% in arts, entertainment and recreation, and 9% in retail. In the coming years air transportation is expected to be a new source of employment, due to the opening and expansion of air service to Sonoma County. Sonoma County Tourism Employment by Industry, 2006 Accommodations & Food Services (52.01%) Arts, Entertainment & Recreation (37.74%) Retail (9.12%) Auto Rental & Ground Trans..63% Retail 9.12% Arts, Ent., & Rec 37.74% Other Travel.44% Accomodations & Food Services 52.01% Source: California Travel Impacts by County, 2007 Preliminary State Estimates. Prepared for the California Travel & Tourism Commission by Dean Runyan and Associates, March Auto Rental & Ground Trans. (0.63%) Other Travel (0.44%) Tourism Industry Earnings per Employee, (2008 $) $50,000 $40,000 $30,000 $20,000 $10,000 $0 12% 9% 6% 3% -3% -6% -9% -12% California Marin 2004 Napa 2005 Sonoma Source: California Travel Impacts by County, 2007 Preliminary State Estimates. Prepared for the California Travel & Tourism Commission by Dean Runyan and Associates, March Tourism Industry Earnings per Employee Real Growth Rates, 15% Source: California Travel Impacts by County, 2007 Preliminary State Estimates. Prepared for the California Travel & Tourism Commission by Dean Runyan and Associates, March Adjusted for Inflation using the US Bureau of Labor Statistics Consumer Price Index California Marin Napa Sonoma

12 Lodging & Hospitality Assessment Occupancy Rate, ADR, RevPar & Growth Sonoma County s occupancy rates stayed relatively stable amidst expansion in Sonoma County s room offerings. The steady occupancy rate of approximately 64% for 2006 and 2007, along with the more than 1,000 rooms approved for construction, suggest a growing demand for Sonoma County room nights. Contributing to Sonoma County s overall revenue growth are increases in the average daily rate. While rates vary greatly over the course of a year, on an annual basis 2007 represented a record high year for room rates, with the average daily inflation-adjusted rate at $ This figure represents a 11.3% increase over Recent revenue per available room (RevPAR) data shows that room revenue in Sonoma County is growing at a rapid pace. RevPar for Sonoma County grew from $74.20 in 2006 to $82 in This represents an inflation-adjusted growth of 10.4%. Preliminary data suggests that room revenue will grow nearly as quickly in As page eight illustrates, visitors staying in hotels and motels are the single largest source of destination spending in Sonoma County, with more than $555.9 million in destination spending in Day travelers, as well as those staying in B&B s and private or vacation homes contribute the majority of the remaining visitor spending. Annual Lodging Occupancy Rates, Sonoma County, % 62% 58% 54% Source: Smith Travel Research, Annual Average Daily Rate (ADR), Sonoma County (2008 $) $130 $124 $118 $112 Revenue Per Available Room (RevPar) Real Growth Rate, Sonoma County, $106 $ Source: Smith Travel Research; adjusted for Inflation using the US Bureau of Labor Statistics Consumer Price Index 15% 12% 9% 6% 3% -3% Source: Smith Travel Research, 2008; adjusted for Inflation using the US Bureau of Labor Statistics Consumer Price Index Revenue Per Available Room (RevPar), Sonoma County (2008 $) $90 $72 $54 $36 $18 $ Source: Smith Travel Research; adjusted for Inflation using the US Bureau of Labor Statistics Consumer Price Index

13 Tourism Generated Taxes TOT Revenue Updates & Spending Transient Occupancy Tax (TOT) is a local tax on room rental revenue in lodging properties located in Sonoma County. TOT revenues in Sonoma County increased 6.95% to $21.36 million in Revenues from TOT are divided between the County of Sonoma (which receives revenue from lodging properties in unincorporated regions) and the individual cities in the county. Collectively, the incorporated cities received 63% of all revenue in 2007, while the County received 37%. This distribution has shifted over time; in 1997, cities received 54% of all TOT revenue. Spending by day travelers and overnight visitors to Sonoma County ments, including sales tax and transient occupancy tax. Total local taxes collected, including TOT, from visitors to Sonoma County in This represents a 10.35% increase from 2005 ($25.3 million). In 2006 Sonoma County visitors, a 2.75% increase from 2006 ($50.82 million). Sebastopol Percentage of Annual TOT Revenue By City, 2008 Sonoma Santa Rosa Rohnert Park Windsor Petaluma Unincorporated Healdsburg Cloverdale Sonoma County (unincorporated and cities) Annual TOT, (Millions of 2008 $) $22 $20 $18 $16 $14 $12 $ Source: Transient Occupancy Tax Report: Q4 2007, Sonoma County Economic Development Board.Adjusted for Inflation using the US Bureau of Labor Statistics Consumer Price Index. Unincorporated Sonoma County TOT Revenue Spending Areas, Fiscal Year, Tourism (25%) Transfer to General Fund (24%) Regional Parks Maint. (23%) Economic Admin. & Arts/Culture/ Development (9%) Reserves (8%) Historical Orgs. (6%) Affordable Housing (2%) Agriculture (2%) Source: Sonoma County Budget fiscal year. Tax Receipts Generated by Travel Spending, (Millions of 2008 $) $60 $48 Unincorporated Cloverdale Healdsburg (37.37%) (0.8%) (9.22%) Petaluma (7.86%) Rohnert Park (9.27%) Santa Rosa (20.55%) Sebastopol Sonoma Windsor (1.7%) (13.25%) (3.91%) Source: Transient Occupancy Tax Report: Q4 2007, Sonoma County Economic Development Board $36 $24 $12 $0 Local State Source: California Travel Impacts by County, 2007 Preliminary State Estimates. Prepared for the California Travel & Tourism Commission by Dean Runyan and Associates, March Adjusted for Inflation using the US Bureau of Labor Statistics Consumer Price Index. 11

14 Visitor Research Summary Visitor Research Results: Survey and Zip Code Analysis The Sonoma County Economic Development Board (EDB), in conjunction with the Sonoma County Tourism Bureau (SCTB) recently conducted the first countywide survey of Sonoma county visitors. This Fall 2007 and Winter 2008 survey provides preliminary insight on Sonoma County Visitor demographics.the results from the Visitor Survey along with data from the SCTB s zip code research program can be found on pages 13 and 14 of this report. Key findings include: The majority of Sonoma County visitors are from the Bay Area, with San Francisco, Oakland and San Jose cited as the principal cities of origin. Visitors are primarily influenced by their friends or relatives to visit Sonoma County. Visitors to Sonoma County listed scenic beauty, dining and outdoor activities as their top motivations for visiting. 12

15 Visitor Survey Results Visitor Demographics, Motivations & Influences Visitor response suggests that majority of visitors to Sonoma County originate in California. More specifically from the San Francisco, Oakland, San Jose areas (42.2%). The L. A. Region (10.6%), and the Sacramento area (6.2%) round out the top three visitor origins. Responding hotel guests cited winery visits, scenic beauty, and relaxation as their leading motivations for visiting Sonoma County. Spending time with a spouse or significant other, along with food and dining, were also strong motivators for Sonoma County visits. 6 of respondents cited a friend s or relative s recommendation as the greatest influence for their decision to visit Sonoma County. Wine country maps and a specific website ranked second and third, respectively. Visitors spend a mean of 2.9 nights in Sonoma County. 5 Hotel Visitor Origins (Based on 56,000+ Zip code records) Winery Visits Scenic Beauty Relaxation Time w/ Spouse or Significant Other Food or Dining Weather/Climate Outdoor Activities Motivations For Visiting Sonoma County (Fall & Winter ) Hotel Guests Activities for Kids 15% 3 45% 6 75% 9 Percentage of Respondents Percentage of Respondents Sacramento-Yolo, CA San Francisco-Oakland- San Jose, CA LA-Riverside-Orange County,CA San Diego, CA New York-Northern New Jersey-Long Island Memphis, TN-AR-MS Chicago-Gary-Kenosha, IL-IN-WI Dallas-Fort Worth, TX Washington -Baltimore, DC-MD-VA-WV Seattle-Tacoma-Brentherton, WA Percentage of Respondents Visitor Influences for Visit to Sonoma County (Fall & Winter ) Friend or Relative Wine Country Map Specific Website Hotel Concierge Magazine Article or Ad Visitor Information Center Newspaper Article or Ad Billboard 13

16 Visitor Survey Results (Hotel Guests) Visitor Interests & Publications Read Outdoor Adventure/ Recreation is the number one interest among surveyed hotels visitors to Sonoma County (54.5%). Other leading interests are Art and Culture (45.6%), Shopping (44.1%), Culinary and Wine Activities (33.8%), Nightlife (29.4%), Sporting Events (27.9%), Family Fun (26.5%), GLBT interest (4.4%). 5 Newspaper travel Sections Regularly read By Sonoma County Visitors (Fall 2007 & Winter 2008) When asked which travel periodicals and publications they read on a regular basis, hotel guests reported reading the travel section of their local newspaper and the San Francisco Chronicle most frequently. Visitor origin data from page 13 suggests the Chronicle s strong showing is correlated with the large number of visitors from the San Francisco Bay Area. Similarly, the West Coast-based publication Sunset is by far the most regularly read magazine by Sonoma County visitors, with over 39.7% reporting that they read the publication regularly. Travel + Leisure (20.6%) and Wine Spectator (19.1%) also have strong Sonoma County visitor readership. Percentage of Respondents Sonoma County Visitor Interests (Fall 2007 & Winter 2008) Local Newspaper San Francisco Chronicle USA Today New York Times Los Angeles Times Washington Post Wall Street Journal Percentage of Respondents Outdoor Adventure/Rec. Arts & Culture Shopping Culinary/Wine Activites Nightlife Sporting Events Source: Tourism Sector Survey 2008, Sonoma County Economic Development Board 14 Family Fun GLBT Interest Lifestyle Magazines Regularly read By Sonoma County Visitors (Fall 2007 & Winter 2008) Sunset Travel + Leisure Wine Spectator In- Flight Publications Food & Wine Gourmet Spa Magazine Natl. Geographic Traveler AAA Publications 5% 1 15% 2 25% 3 35% 4 Percentage of Respondents

17 Tourism Industry Survey: Results Summary The Sonoma County Economic Development Board (EDB) recently updated its 2007 survey of the Sonoma County tourism businesses about the tourism industry. Owners and executives representing 2 of the survey sample (approximately 500 tourism businesses) rated their confidence in the industry and identified changes and needs they expect at their businesses in the near future. Key Findings include: Business have a positive outlook for the coming year, though they are concerned about the effect the falling dollar will have on the tourism portion of their business. The vast majority of respondents considered exploring new programs for culinary/wine tourism and cultural heritage tourism as useful. Strong interest for a Sonoma County restaurant week, customer service awards program, and heritage or historical program was also noted. Tourism Industry Survey: results Summary Most respondents believe Sonoma County s wine reputation and culture help attract visitors. Respondents feel local government can make a positive difference in the tourism industry by focusing efforts and resources on strategic marketing outside Sonoma County, by assisting with licensing and permits, and providing workforce education and training. 15

18 Tourism Industry Survey Survey Responder Demographics Owners and executives of more than 100 diverse tourism businesses responded to the EDB s 2007 Tourism Industry Survey. The following table indicates the percentage breakdown of the tourism industry businesses responding to the survey. The Winery category represented the largest segment of survey respondents at 24.4%, followed by Vacation Rentals (20.4%), Bed & Breakfast (B&B) (20.4%), Full-Service Lodging (16.3%), Limited-Service Lodging (12.2%), Restaurant (12.2%), and Campground (1%). The surveyed businesses reflect the diverse strength of Sonoma County s tourism industry. Lodging Classifications: Full-Service Lodging Offering a full range of on-premises food and beverage service, cocktail lounge, entertainment, conference facilities, shops and recreational activities. Wide range of services provided by uniformed staff on duty 24 hours. Vacation Rentals These properties are fully furnished condominiums, town homes or single-family-style homes - featuring amenities such as games, beach equipment, DVD libraries, and a stocked kitchen - rented out on a temporary basis to tourists as an alternative to a hotel. Bed & Breakfast Smaller establishments emphasizing a more personal relationship between operators and guests. Guest units tend to be individually decorated. Rooms may not include some modern amenities and may have a shared bathroom. Usually owner-operated, with a common room, separate from the innkeeper's living quarters, where guests and operators can interact during evening and breakfast hours. A continental or full, hot breakfast is served and is included in the room rate. Demographic Profile of Responding tourism Industry Businesses, 2008* Winery 24.5% Full-Service 16.3% Restaurant 12.2% Full-Service Lodging (16.3%) Vacation Rentals (20.4%) Bed & Breakfast (20.4%) Vacation Rentals 20.4% Limited-Service 12.2% B&B 20.4% Limited-Service Lodging (12.2%) Restaurant (12.2%) Winery (24.5%) Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board *Campground not included in above graph- represents 1% of survey responses. Limited-Service Lodging Only the basic services and facilities are available. Self-service aspects are predominant. Commonly, a continental breakfast may be offered rather than having a restaurant on premises. Campground A place used for overnight stay in the outdoors, where an individual, family, or group may camp. Consists of open pieces of ground where a camper can pitch a tent or park an RV. Some campsites have amenities including fire pits, picnic tables, utility hookups, shower facilities and more. Source: AAA,

19 Tourism Industry Survey Visitor Origins & Traveler Type Each year Sonoma County hosts more than seven million visitors. These visitors a the catalyst for local economic vitality, contributing more than $1.3 billion in 2006 to the area s economy. Sonoma County s award-winning wineries, spa experiences, and miles of scenic Pacific Ocean coastline draw both domestic and international visitors Sonoma County International Visitor Origins (Respondent-Based), 2008 According to survey respondents, Sonoma County s main visitor origins are domestic, with the majority coming from San Francisco (22.4%) and Other U.S.A. ( not including California) (21.4%). When asked about international visitation, respondents listed Europe, Canada, and the United Kingdom as the top three areas of origin. Further, respondents cited that the vast majority of travelers to Sonoma County were first-time leisure travelers (43.6%) or repeat leisure travelers (42.3%). Business travel in Sonoma County was reported as being approximately 1 of Sonoma County s visitor mix, with 7.7% cited as repeat business travelers and 2.6% as firsttime business travelers. Please note that that no data from the industry survey was weighted in the analysis presented here. All data in this section is based on tourism industry owner/executives reporting on their own market demographics. 25% Sonoma County Visitor origins, (Respondent-Based), Europe Canada UK Japan Other Asia China Mexico India California International Visitor Trends, % Change from Jan to Jan CANADA, 13% MEXICO, 1 ASIA, 6% JAPAN, -3% Source: California Travel & Tourism Commission SOUTH AMERICA, 25% AUSTRALIA/OCEANIA, 6% UNITED KINGDOM, 6% WESTERN EUROPE, 11% 2 15% 1 First-time Business Sonoma County Traveler Type (Respondent-Based), 2008 First-time Repeat Group Business Repeat Group 5% San Francisco U.S.A. (Not CA) Other (California) Sacramento East Bay Marin County Silicon Valley LA Region International San Diego Source: Tourism industry Survey 2008, Sonoma County Economic Development Board Repeat Leisure First-time Leisure First-time Leisure (43.6%) First-time Business (2.6%) Repeat Leisure (42.3%) First-time Group (2.6%) Repeat Business (7.7%) Repeat Group (1.3%) Source: Tourism Sector Survey 2008, Sonoma County Economic Development Board 17

20 Tourism Industry Survey Expansion, Industry Confidence/Outlook & Green Practices Tourism industry offerings expanded in Sonoma County, with more than 28% of respondents citing an expansion in operations in Approximately 6 of responding establishments had a somewhat confident or confident outlook for their operations in Respondents Perceived Effect of the Falling Dollar on Sonoma County s Tourism Industry, 2008 Industry leaders do not expect the falling dollar to have a positive effect on Sonoma County s tourism industry. However, the dollar s decrease in value correlates positively with a steep increase in international visitation as Sonoma County becomes a more affordable destination for international travelers. Negative 46.9% Don t Know 21% Positive 32.1% In reaction to greening trends, more than 75% of respondents report having implemented new environmental practices. To date, visitor reaction to these green practices has been highly positive. Approximately 7 of survey respondents report very positive or positive client reactions. Percentage of Respondents That Expanded Operations Over The Last 12 Months N/A 7.2% No 64.3% Yes 28.6% Positive (32.1%) Negative (46.9%) Don't Know (21%) Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board Effect The Falling dollar will Have on Tourism Business (Respondent-Based), 2008 Domestic Visitation International Visitation Yes (28.6%) No (64.3%) N/A (7.2%) Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board Sonoma County Tourism Industry Outlook For The Next 12 Months (Respondent-Based), 2008 Concerned Neutral 9.9% 4.9% Somewhat Confident 32.1% Confident 25.9% Somewhat Concerned 27.2% Visitor Spending Percentage of Respondents Increased Decreased Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board Customer Reaction to New Environmental Practices 5 (Respondent-Based), Very Positive Positive Confident (25.9%) Somewhat Concerned (27.2%) Somewhat Confident (32.1%) Concerned (6.1%) Neutral (4.9%) Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board Unaware Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board

21 Tourism Industry Survey Local Gov t Assistance, Promotional Assistance & Marketing Sonoma County s tourism industry is a diversified market of service-oriented businesses and segmented customer markets. This diversification results in a wide range of marketing channels employed by businesses to reach out to customers. Reflecting the increase in the provision of travel-related information and services on the Internet, respondents identified the Internet as the most widely used marketing channel. Membership organizations, regional publications, direct mail, and local newspaper are also frequently used marketing avenues. According to 9 of respondents, local government should focus tourism industry support through strong, targeted marketing activities. Local governments could also assist tourism businesses by streamlining licensing and permit application as well as working with other local agencies to provide hospitality-focused education and training. More than 9 of respondents suggested local promotional agencies focus their efforts on marketing, with 76% citing PR/Media visits as an area where local promotion agencies could help the tourism industry. Other suggestions were increased information on travel data, specifically tourist trends and industry trends. In their own marketing efforts respondents reported spending 0-5% or 5-1 for Accordingly, less respondents in 2008 reported spending 10-25%, and none reported spending more than 25%. Desired Focus for Local Government Assistance, 2008 Marketing Licensing/Permits Education/Training Financial Assistance High-speed Data Transmission Crime Prevention Other Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board Focus for Local Promotion Agencies Assistance, 2008 Marketing PR/Media Visits Tourist Trends Customer Service Industry Trends Marketing Channels Utilized by Tourism Businesses, 2008 (% Of Respondents) Other Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board Internet Membership Orgs. Regional Publications Direct Mail Local Newspaper Tradeshow Radio Other National Magazine Television Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board Percentage of Gross Revenue Spent on Marketing, 2007 & Percentage of Respondents % % Source: Tourism Industry Survey 2008 & 2007, Sonoma County Economic Development Board 19

22 Tourism Industry Survey Attractions, Potential & Reputation The high confidence in future business performance is supported by survey results showing more than 75% of respondents believe Sonoma County has high potential for attracting tourists and encouraging repeat visits. Only 1.3% of respondents feel Sonoma County has poor potential for attracting visitors. An overwhelming percentage of respondents,over 8, agree that Sonoma County s wine reputation and culture is a valuable tourism attraction. Although the vast majority of tourism businesses agree wine is a vital attraction, many of Sonoma County s diverse assets were identified as key attractions. Such attractions include: landscape and scenery (Russian River, redwoods, coast), scenic drives, cycling, weddings and anniversaries, shopping, events, cultural and history, and gourmet food, restaurants, and products. Sonoma County s Potential for Attracting Visitors Poor Potential Low Potential 1.3% 1.3% Medium Potential 21.3% High Potential 76.3% 74.7% High Potential (76.3%) Low Potential (1.3%) Medium Potential (21.3%) Poor Potential (1.3%) Source: Tourism Industry Survey, Sonoma County Economic Development Board Top Attractions for Sonoma county (Respondent-Based) Scenic Beauty The Coast Wine Restaurants/Culinary Activities level to Which Sonoma County s Wine Reputation and Culture Attract Visitors 10 Rivers Music Events/Festivals Redwoods Cycling/Outdoor Sports Source: Tourism Industry Survey, Sonoma County Economic Development Board Percent of Respondents High Medium Low Source: Tourism Industry Survey, Sonoma County Economic Development Board 20

23 Tourism Industry Market Opportunities, Culinary Program & Historical Trail/Program Industry responders cited many new opportunities for expansion of Sonoma County s tourism assets. In particular, respondents noted that new culinary, customer service, and historical programs would be useful. Survey respondents also indicated that there were many new market opportunities for Sonoma County, International travelers, Eco-Tourism, Cycling, Health and Wellness, and Lesbian, Gay, Bisexual, Transgender (LGBT) came in as the top five, respectively. The development of innovative culinary and wine programs can be an effective way of increasing visitors length of stay, return visits, and satisfaction to regions of the County. Unique food and wine programs can also help differentiate Sonoma County in an increasingly accessible global tourism market. 87% of respondents felt new culinary and wine programs would be somewhat useful, useful, or very useful in Sonoma County, with 45% indicating very useful. According to the Travel Industry of America (TIA), more than 8 of the 155 million US traveling adults take overnight trips of 50+ miles or longer. Four out of five include historical, arts, culture, or heritage activities in their traveling plans. A majority of the cultural heritage visitors report spending 38% more and staying 38% longer than other tourists. 75% of respondents indicated new cultural and heritage programs would be somewhat useful, useful, or very useful. Only 6.3% felt this would be somewhat useless. New Culinary & Wine Program Usefulness (Respondent-Based), 2008 Very Useful Useful Somewhat Useful Neutral Somewhat Useless Percentage of Respondents Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board Restaurant Week Usefulness (Respondent-Based), 2008 Somewhat Useless 2.9% Neutral 11.8% Somewhat Useful 23.5% Very Useful 26.5% Useful 35.3% International Eco-Tourism Cycling Health & Wellness Lesbian, Gay, Bisexual, Transgender (LGBT) Other Hispanic/ Minority Emerging Market Opportunities for Sonoma County (Respondent-Based), Percentage of Respondents Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board Very Useful (26.5%) Very Useful Useful (35.3%) Somewhat Useful (23.5%) Neutral (11.8%) Somewhat Useless (2.9%) Source: Tourism industry Survey 2008, Sonoma County Economic Development Board New Historical Trail & Heritage Program Usefulness (Respondent-Based), 2008 Percentage of Respondents 4 35% 3 25% 2 15% 1 5% Useful Somewhat Useful Neutral Somewhat Useless Source: Tourism Industry Survey 2008, Sonoma County Economic Development Board 21

24 Tourism Industry Survey Marketing Program Effectiveness & Customer Service Awards Program Survey responses suggest strong support for a hospitalitycentered awards program in Sonoma County. More than 68% of responders believe that a customer service awards program would provided incentive for hospitality staff and/or increase recognition of Sonoma County as a destination with a strong commitment to exceptional customer service. More than half of respondents indicated that they would send their hospitality staff to a Sonoma County customer service awards program. Effects of a Customer Service Awards Program in Sonoma County Countywide marketing initiatives are doing well. More than 82% of respondents reported they found current county marketing program to be very useful, useful, or somewhat useful. Only 1.3% found county marketing program to be useless. Regional marketing efforts are similarly showing a positive response. 66.7% believed that Sonoma County s regional marketing efforts are very useful, useful, or somewhat useful. Very useful Useful Somewhat useful Effectiveness of Countywide Marketing Initiatives 5% 1 15% 2 25% 3 35% 4 Have no effect Percentage of Respondents Provide incentive for hospitality staff to increase their emphasis on customer service. Source: Tourism Industry Survey, Sonoma County Economic Development Board Increase recognition of Sonoma County as a destination with a commitment to exceptional customer service. Neutral Somewhat useless Useless Source: Tourism Industry Survey, Sonoma County Economic Development Board 5% 1 15% 2 25% 3 35% 4 Percentage of Respondents Percent of Respondents that Would Send Hospitality Staff to a Customer Service training Program 6 Very useful Useful Somewhat useful Neutral Effectiveness of Regional Marketing Initiatives Percent of Respondents Somewhat useless Yes No Don't know Useless Source: Tourism Industry Survey, Sonoma County Economic Development Board Source: Tourism Industry Survey, Sonoma County Economic Development Board Very useless 5% 1 15% 2 25% 3 35% Percentage of Respondents 22

25 Methodology The Sonoma County Economic Development Board (EDB) recently updated its 2007 survey of Sonoma County tourism businesses in relation to the tourism industry. Owners and executives of more than 100 tourism businesses rated their confidence in the industry and identified changes and needs they expect at their businesses in the near future. The responses covered businesses in a broad range of tourism establishments. The survey asked tourism centered businesses to respond to a broad array of questions about their market and marketing efforts, their visitor demographics, their expansion plans, the demographics of the industry, and their opinion on key County tourism policies. This report represents the findings from that survey as well as an analysis of those responses. In addition to the survey responses, the Sonoma County 2008 Annual Tourism Report also includes general background information for the tourism industry on a regional and national level. Statistics came from the Travel Industry Association (TIA), and the California Travel and Tourism Commission s 2006 California Travel Impacts by County, prepared by Dean Runyan & Associates and Smith Travel Research and updated March 2008, The EDB used the U.S. Bureau of Labor Statistics Consumer Price Index to adjust some data for inflation, Lodging classifications were defined by AAA, The EDB collected and compiled all TOT data from each Sonoma County jurisdiction. Please note that all survey data contained in this report is based on the information self-reported by respondents, which was not factually verified by the EDB. The responses were then gathered into a database for analysis. Due to the fact that survey respondents may provide no responses to some questions, the category percentages indicated in the graphs for those questions may not sum up to 10. Where replies are mutually exclusive, percentages may be slightly off due to rounding. Where replies are not mutually exclusive, percentages may total more than 10. As mentioned above, it was our intention to obtain averages that provide a general snapshot of various issues for the hospitality/tourism industry in Sonoma County. Accordingly, the data averages are not weighted by any factor or interest. Moody s Economy.com Section 2008, Moody s Analytics, Inc. ( Moody s ) and/or its licensors. All rights reserved. The information and materials contained herein are protected by United States copyright, trade secret, and/or trademark law, as well as other state, national, and international laws and regulations. Except and to the extent as otherwise expressly agreed to, such information and materials are for the exclusive use of Moody s subscribers, and may not be copied, reproduced, ed, repackaged, further transmitted, transferred, dissemiand mechanical error as well as other factors, however, all information on contained herein is provided AS nated, redistributed or resold, or stored for subsequent use for any purpose, in whole or in part. Moody s has obtained all information from sources believed to be reliable eliable. Because of the possibility of human IS without warranty of any kind. UNDER NO CIRCUMSTANCES C CES SHALL L Moody s OR ITS LICENSORS BE LIABLE TO YOU OR ANY OTHER PERSON IN ANY MANNER FOR ANY LOSS OR DAMAGE CAUSED BY, RESULTING FROM, OR RELATING TO, IN WHOLE OR IN PART, ERRORS OR DEFICIENCIES I CONTAINED IN THE INFORMATION PROVIDED, INCLUDING BUT NOT LIMITED TO ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES HOWEVER THEY ARISE. The financial reporting, analysis, projections, observations, and other information o contained herein are statements ts of opinion and not statements of fact or recommendations to purchase, sell, or hold any securities. Each opinion must be weighed solely as one factor in any investment t decision made by or on behalf of any user of the information contained herein. 23

26 Acknowledgements The 2008 Annual Tourism Report would not have been possible without the contributions of many individuals. Most of the credit for this study belongs to the local businesses that participated in the survey. Their responses created the foundation upon which the tourism sector could be studied and analyzed. Special acknowledgement is also due to Ken Fischang and Tim Zahner at the Sonoma County Tourism Bureau for their invaluable suggestions and generous provision of statistical data on the tourism sector in Sonoma County. Finally, Camille Padilla, Tourism Project Coordinator with the EDB, contributed a significant amount of time and effort to the report through surveying administration, compilation, and organization of the report, data, and survey findings. Camille Padilla updated and consolidated the myriad data sources and statistics from previous years to create this comprehensive analysis, and deserves special thanks. Ben Stone Executive Director

27 EDB Sonoma County Economic Development Board

28 EDB Sonoma County Economic Development Board With Acknowledgment and Appreciation to local key businesses supporting Sonoma County Economic Development: Chairman s circle: Executive Tier: Associate Tier: County of Sonoma Board of Supervisors Sonoma County Permit & Resources Management Community Development Commission Sonoma County Health Services Sonoma County Transportation & Public Works