GALVESTON — Island tourism reached an all-time high last year as overnight visitors and day-trippers arrived in numbers larger than ever and spent more money, driving up business sales, employment and tax revenue for the seaport city.
But growth is showing signs of leveling off and the city needs more hotels, more attractions and enhanced marketing strategies to stop the numbers from plateauing, officials said.
After four years of Hurricane Ike recovery, visitor volume last year reached a new peak of about 5.8 million people, up from about 5.7 million the year before, according to a report by Pennsylvania-based Tourism Economics released Thursday by the Galveston Island Convention & Visitors Bureau.
The report underscored the significance of visitors to the island, concluding that about 1 in 3 Galveston jobs is sustained by tourism, which generated total income of $257 million last year.
Visitor spending last year also reached new highs, with $687.2 million going into restaurants, hotels, retail shops and other venues, marking a 5 percent increase compared with the year before.
Island businesses booked $136.7 million in hotel and lodging revenues last year, an 8 percent increase.
Kelly de Schaun, executive director of the visitors bureau, attributed the spike in tourism to increased marketing efforts, a strong Texas economy and new tourist attractions such as the $60 million Galveston Island Historic Pleasure Pier that opened in 2011 and operated its first full season in 2012.
National media attention from the Travel Channel, Family Vacation Critic and TripAdvisor didn’t hurt either, she said.
Riding a wave
But while tourism is at an all-time high, surpassing levels before Hurricane Ike struck in 2008, the growth rate is at risk of leveling off unless the visitors bureau and the island as a whole take steps, de Schaun said.
In 2010, the number of visitors increased by 11.3 percent compared with the year before. In 2011, the number increased by 8.3 percent compared with the year before. In 2012, the number grew 4.8 percent, and this year it grew by only by 2.2 percent, according to the report.
The island has been riding a recovery tide for several years, benefiting from both federal disaster recovery money and private sector investments, de Schaun said. To maintain and spur growth, the city needs to meet demand for accommodations, add new attractions and lure more visitors during the winter months by focusing on the island’s growing appeal as a destination for nature and recreational tourism, which includes birding, kayaking and boating, de Schaun said.
The visitors bureau and other groups also are working to increase connectivity between the cruise ship terminals and downtown and improve signage directing visitors to the major shopping and dining district. The idea is to get more cruise ship passengers to stay before or after their voyages.
The bureau also is considering ways to increase both print and digital marketing in publications targeting cruise passengers, de Schaun said. Last year, cruise activity generated $43 million in passenger onshore spending, according to the report.
New attractions both large and small also can increase the number of visitors to the island, de Schaun said.
To lure more visitors in the offseason, the bureau a few years go implemented a holiday advertising campaign that has increased tourist spending in November and December.
The island could also increase tourism growth by encouraging development of more hotel rooms in Galveston, where about 5,000 rooms, including rental properties, now operate. Developers are planning more hotels, but information about how many rooms they’ll add and whether that will be enough wasn’t immediately available.
The island’s lodging market is tightening, however, as growth in demand has exceeded growth in supply since 2010, according to the report. Room-night demand is 7.8 percent higher than in 2010, while supply grew only 1.8 percent during the same period.
Growth in demand and price increases driven by it pushed room revenues up 6.2 percent last year, according to the report.
“Both regionally and nationally, we’ve seen greater interest in Galveston because of its convenient location and diversity of offerings, from beaches and family attractions to historical sites and cruising,” de Schaun said. “We are thrilled by the island’s successes but are working diligently to keep the momentum going.”
Conclusions of the 2013 economic impact report by Pennsylvania-based Tourism Economics.
Visitors spent $160 million on food and beverages, $156 million on lodging and $133 million on retail shopping in 2013.
Tourism on the island generated $136 million in tax revenues in 2013, with $63.6 million accruing to state and local governments.
Employment growth in the island tourism industry is outpacing overall job growth in the city. Since the 2009 employment trough, tourism job growth amounts to 10 percent, compared to 6 percent for total employment on the island.
A total of 10,205 jobs were sustained by visitors to the island last year. This included 7,879 direct and 2,326 indirect induced jobs.
About 33.6 percent (1 in 3) of all jobs on the island were sustained by tourism.
Tourism-sustained jobs generated a total income of $257 million in 2013.
Overnight visitors to Galveston spent $110 per person per day, while day trippers spent $52 per person a day. An estimated 56.1 percent of all visitors were day trippers.