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Business at SFO looks ready for takeoff

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Local,Science and Technology,Katie Worth

In the drought-afflicted garden of San Francisco’s tourism market, green shoots are continuing to sprout up in the bed occupied by the San Francisco International Airport.

Despite conventions and business travel still lumbering along through the Great Recession, SFO expects a moderate spike in international travelers and perhaps some small gains in domestic travel.

In the current fiscal year, which ends in June, San Francisco’s airport expects to see a 0.7 percent drop in international passengers — but next fiscal year, that figure will bounce back to a projected 5.5 percent increase. Domestic travel, which has continued to do well in recent years in spite of the bad economy, will see a 5.1 percent increase this fiscal year, and another 1.5 percent growth next fiscal year, Deputy Airport Director Kandace Bender said.

Though she warned the prognostications are “an inexact science,” Bender said that overall, this fiscal year the airport is expecting a 4 percent growth in passengers, and next fiscal year SFO hopes for another 2.5 percent increase, she said.

All this comes at a time when most airlines are seeing dramatic decreases in passengers. Bender pointed to a USA Today report Thursday that examined the domestic seat capacity being flown out of every airport in the nation. San Francisco’s airport saw the second-highest growth of any large airport in the U.S., only behind Milwaukee and ahead of dozens of others that are experiencing steep declines.

Much of SFO’s growth in domestic traffic in recent years can be attributed to the 2007 opening of Virgin America, which in turn prodded Southwest Airlines and Jet Blue to step up their flight service across the nation, Bender said. Between the three carriers, the airport has 600 domestic flights per week that didn’t exist three years ago.

Meanwhile, the airport’s international service appears to be about to boom: New flights from Berlin, Zurich, Frankfurt, London, Paris, Tokyo and various locations in South America will contribute to a 7 percent increase in seat capacity between SFO and international airports this year, San Francisco Conventions and Visitors Bureau chief Joe d’Alessandro said.

An aggressive campaign to promote San Francisco as a destination in 13 countries worldwide can partly be thanked for the increase, d’Alessandro said. Also, the relative strength of the euro over the dollar means trips to the U.S. are still a bargain for many international visitors.

The airport is not the only piece of San Francisco’s tourism pie that may see some gains, said Mark Woodworth, president of travel analyst company PKF Consulting. He said that lodging may see a small increase in demand this year — about 0.9 percent — after a 4.5 percent downturn last year. Many other markets are not yet seeing that bounce-back and Woodworth said it is a testament to San Francisco’s strength as a tourism market.

The steep decline in room prices is playing no small part in that recovery, said Rick Swig, president of hospitality consultant RSBA and Associates.

“Our room rates are so far down from where they have been historically, it’s just a phenomenal deal for travelers,” he said. “So it’s cheaper to come here and The City is just as good as it’s always been. It’s a great value.”


Flying into SFO

How various travel segments are doing at San Francisco International Airport:

International travel: Rising
Domestic leisure travel: Flat to rising

Business travel:
Coming back
Conventions: Down

Source: San Francisco Conventions and Visitors Bureau

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