As homeless people turn off visitors, San Francisco tourism senses threat

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Homeless man in San Francisco
A homeless man outside of Caltrain station in San Francisco in March. Photo Credit: David Tran Photo/Shutterstock

When London Breed was sworn in as the new mayor of San Francisco last week, the city's homeless crisis was at the top of her agenda. It was also top of mind for her constituents, especially those whose fortunes depend on tourism.

The increasingly visible homeless problem, coupled with an epidemic of drug use and the resulting blighted streets, are threatening the city's reputation as one of the most desirable business and leisure destinations in the country.

Those problems deeply concern the city's tourism industry.

"There's no question that there is an issue," said Joe D'Alessandro, president and CEO of San Francisco's tourism marketing organization, San Francisco Travel. "It's a national issue that we're facing, and ... it continues to be a problem. We don't want any sort of negative impression of San Francisco being out there, so we are working quite aggressively with the city and with the private sector to be creative in problem solving."

Current estimates peg the homeless population of San Francisco at about 7,500, a number that hasn't changed much in the past decade despite ongoing efforts to combat the crisis. It is also a number that stands in stark contrast to the city's tech-driven economic boom, which has resulted in housing shortages and sky-high costs. 

To address the problem, the new mayor has proposed, among other initiatives, creating more affordable housing, eliminating the city's tent encampments, opening safe-injection facilities so people don't inject drugs in public and increasing access to the drug naloxone to reduce opioid overdoses.

Breed's swearing-in followed by just a couple of days news that a major medical association had decided not to host its annual convention in San Francisco. D'Alessandro said the association, which asked that its name not be made public, cited the conditions on the city's streets among its reasons for not meeting in San Francisco this year.

That concern came as no surprise to Jessica Fricchione, senior editor for books for the U.K.-based IOP Publishing. After attending the Biophysical Society's annual meeting at San Francisco's major conference venue, the Moscone Center, this past February, Fricchione said she had no desire to return to San Francisco until the city addresses its problems.

"I was so appalled by everything that was happening," she said. "Mostly what I saw was straight-up open drug use." 

Fricchione said she witnessed several incidents of "hard-core" drug use, both smoking and injecting, in daylight hours around the convention center, which is located in San Francisco's SOMA neighborhood, adjacent to the city's downtown Union Square and Tenderloin areas.

This was the third visit to San Francisco in the past 10 years for Fricchione, who lives in Andover, N.J. But she said she had never noticed the problems to the degree that she did this year. 

Nor is California's homeless problem confined to San Francisco. Two weeks after the conference there, she visited Los Angeles and again noticed that the crisis had become very visible.

"This is a problem in a lot of places," she said. "But in San Francisco, it was so concentrated [right] where the conference was."

Interestingly, the Moscone Center is expected to drive an increased amount of travel to San Francisco when a major overhaul is completed in January. 

"Our growth rate has slowed down in the last two years," D'Alessandro said. "And the main reason ... is that we're renovating our convention center, the Moscone Center, and the main buildings were shut down for six months last year, and that's the single largest generator of business into San Francisco."

He reported that for 2019, in anticipation of the grand reopening of the Moscone Center, San Francisco is seeing more room nights booked than ever before.

Despite the challenges, the allure of San Francisco as a tourist destination, rooted in its many landmarks and features like its antique cable cars, beautiful bay views, Alcatraz and Fisherman's Wharf, continue to attract investment in tourism infrastructure.

Virgin Hotels San Francisco, the second hotel of that brand in the U.S., will be opening later this year, and a new Langham Place, Waldorf Astoria and AC Hotel by Marriott are all in the works for the next one to three years.

In the Hot Seat

Joe D'Alessandro, president and CEO of the city's tourism marketing association San Francisco Travel, talked about how the city plans to tackle homelessness, drug use on the streets and cleanliness (or lack thereof). Read More

In addition, when it opens next year, the 18,000-seat Chase Center arena in the city's Mission Bay district will become the home of the NBA champion Golden State Warriors as well as the city's first major concert venue. What's more, in 2019, a new Central Subway line is scheduled to open; it will connect the Mission Bay area, the Moscone Center, Union Square and Chinatown.

Christian Tong, operations manager for Intrepid Urban Adventures in San Francisco, said the city continues to be attractive to travelers for its outstanding views, restaurants and activities, but visitors also typically must confront the city's blights. 

"The large homeless population in San Francisco is more of a mental health and humanitarian issue, although it has affected the tourism and related industries," Tong said. "Whether a visitor is staying in Fisherman's Wharf, North Beach or Union Square, they'll most likely run into a few of the city's homeless people, with the largest concentration in the Tenderloin neighborhood."

San Francisco, which traditionally has ranked among the top 10 most visited cities in the U.S., last year welcomed 25.5 million visitors, a 1.2% increase over the 25.2 million who visited in 2016. Even so, that increase represented a slowing in growth from the 2% to 4.8% gains that were made in the prior three years. 

In addition, the city saw a very slight drop in total overnight visitors in 2017, to 10.3 million from 10.4 million in 2016.

Those are the kinds of early warning signs San Francisco Travel hopes will spur the city into addressing its challenges head on.

The first step, D'Alessandro said, is simply owning up to the problems.

"I think that it's important for all of us to be honest and transparent when we talk about our destinations," he said. "We were pretty bold in coming out months ago and saying we have an issue on the streets. Travel and tourism is San Francisco's leading industry, and it has been for a long time, and we want to make sure it stays healthy and continues to grow. 

"So we took that bold stance of going public with it because we wanted to make sure that during the election year, when we had candidates running for mayor, that they saw the reality of the importance of travel and tourism to San Francisco and why we needed to take steps to make it better."

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