The South Coast saw a 3% increase in hotel occupancy in 2024, marking the largest growth out of any competing locations in California, Visit Santa Barbara shared at its Tourism Summit on Thursday.

Kathy Janega-Dykes, president and CEO of Visit Santa Barbara, said that translates to 55,000 more visitors who came to the area and enjoyed 110,000 more dinners at local restaurants.

Despite the growth, Janega-Dykes said the industry faced challenges because of consumers being more cautious with their spending. 

“Our team was consistently told by non-lodging businesses, while hotel and short-term rentals have provided a boost, certainly to retail food and beverage businesses, their overall performance has been challenged by consumers generally being much more cautious with their spending,” Janega-Dykes said. 

However, she said there are exciting things to come in the year ahead with new restaurants, retail and the reopening of the Four Seasons Resort The Biltmore Santa Barbara. 

The summit’s keynote speaker, Isaac Collazo, vice president of analytics at STR Inc., a division of CoStar Group, said hotel demand around the world has exceeded pre-COVID-19 pandemic levels. The United States, however, is still struggling to return to 2019 numbers. Collazo said that’s because of Americans choosing to travel internationally.

“One thing we found over the last two years is Americans are traveling outbound in amounts we haven’t seen before,” Collazo said. “We assumed that after 2023 it would come back down, but it didn’t in 2024 and will continue in 2025. So, outbound travel is very strong to the detriment of U.S. domestic travel.”

Collazo said that despite inflation, Americans — even those facing financial difficulty — are still traveling; they’re just finding new, cheaper ways of doing so.

“One way is short-term rentals, going with friends and family and really splitting the cost, making it much cheaper than they could at a hotel,” Collazo said. 

He explained that across the United States, the demand for short-term rentals is rising while hotel demand has stayed stagnant. However, Santa Barbara outperformed the rest of the country in terms of room demand, according to Collazo. 

Looking at the year ahead, Collazo said it could be more of the same, but the impacts of the new federal administration under President Donald Trump are still unknown. Collazo said they won’t really know those impacts until later this summer. 

While travel within the United States has been predicted to fully recover in 2026, Collazo said it depends on people’s perception of the nation.

“Inbound travel is supposed to right itself in 2026. Again, this is really dependent on how people view the United States, and that’s what you have to wait and see,” Collazo said, “because if it’s deemed unfriendly, then we may not see that occur.”

The summit included a panel discussion moderated by Rick Fidel, managing director of Rosewood Miramar Beach, with Warren Nocon, general manager of Hotel Californian, Brandon Ristaino, founder of Good Lion Hospitality, and Sherry Villanueva, founder of Acme Hospitality. 

The panelists highlighted the challenges of the rising costs of labor and goods, the importance of local partnerships, and strategies for attracting new customers. 

Villanueva said travelers are seeking deeper experiences, without overspending. 

“We’re trying lots of different ways to bring that experience to them, whether it’s more of a connection to the producers who are are providing products, getting to know their stories, being able to tell those stories, and creating opportunities for them to actually meet those producers and engage with them in a deeper level,” Villanueva said.