Experts talked about Santa Barbara’s more-than-$2-billion tourism industry at an annual summit Wednesday and said they expect increases in hotel demand in the coming years.
“Tourism and hospitality are essential to our community’s economic health,” Visit Santa Barbara President and CEO Kathy Janega-Dykes told the crowd at Wednesday’s event. “We should always be looking for smart and collaborative ways to support and ensure it continues to thrive.”
Tourism drives more than $2 billion in annual visitor spending locally, Janega-Dykes said, and supports jobs for 15,000 people.
The area should expect growth in hotel revenue over the next few years, especially with large upcoming events such as the FIFA World Cup this summer and the 2028 Summer Olympics, according to speaker Chuck Davison, vice president of commercial strategy and partnerships at Tourism Economics.
Locally, hotel demand on the Santa Barbara South Coast is near, but below, 2019 levels. The revenue growth between January and November 2025 was largely rate-driven, Davison said, with rates up across the board compared to 2024.
Over the next two years, room revenues are expected to go up by 0.5% in 2026 and 3.9% in 2027.
Room demand is expected to remain flat in 2026, but small increases — such as the expected reopening of some rooms at the Four Seasons Resort The Biltmore Santa Barbara later this year — will drive demand. The area should see additional demand in 2027, as the Biltmore reopens more rooms.
Davison called it a “slow to hire, slow to fire economy,” with tariffs, the highest since the 1930s, impacting hiring. However, he said tariffs are causing increased revenues nationwide.
The economy is expected to pick up in 2026, with GDP growth predicted for 2026 and 2027, he added.
Caroline Beteta, president and CEO of Visit California — a nonprofit formed in 1996 that focuses on advertising the “California experience” — also offered insights into Visit California’s tourism strategies and campaigns.
She said California is the No. 1 travel destination in the United States, with a tourism economy 1.5 times the size of Florida’s and 2.5 times the size of Hawaii’s.
Beteta said Visit California’s recent domestic paid media strategy was split into three campaigns: Let’s Play, Childhood Rules, and Playful Journeys, which all largely focused on the family experience and making memories.
She said the company has 23 million followers across its channels and works with influencers such as Mandy Moore to reach more customers.
“We’ve got content featuring Santa Barbara that has seen about 280,000 page views, and about 25,000 qualified leads,” Beteta said. “Our job is to be this major platform and a portal that really goes right to you.”
Panelists Lynn Mohrfeld of the California Hotel and Lodging Association and Rachel Michelin of the California Retailers Association, moderated by owner and operator of bouchon Santa Barbara Mitchell Sjerven, further broke down retail, hotel, lodging and small business trends.
Panelists discussed Santa Barbara’s retail vacancy rate — just under 8%, and 15% just on State Street — and talked strategy.
Michelin called retail “resilient,” but said the area must think about how to bring in more traffic for smaller retailers and help lower their compliance costs.
She said unnecessary and predatory litigation in California is a big problem.
“I love all sides of retail, especially small businesses, and that’s why it makes me so angry when I see them being put out of business because of the regulatory compliance environment and the litigation environment that we have in our state,” she said.
Mohrfeld said small businesses have a benefit that bigger ones do not: They can move fast and pivot their strategies when needed.
“They don’t have 14 layers of marketing or corporate to go through to do something,” he said. “(…) People don’t just come here because the weather’s nice. People come here because all of you guys spent thousand of dollars to promote and sell Santa Barbara.”