The visitor puzzle in the North Bay

As we enter the 2025 tourism season, the core North Bay counties (Marin, Napa and Sonoma) are settling into what seems to be a post-pandemic pattern. Tourism is a stated part of North Bay economic development strategies across all counties. This region has global branding (Napa Valley, for example) and reach for North Bay businesses; we “export” those local experiences to the world. While that means more challenging parking and crowded downtown areas, local merchants (and thus employers) and municipalities want those feet and “heads in beds” to augment sales and transient occupancy tax (TOT) revenues.

Regional connections among these neighboring counties change how commercial real estate and infrastructure are built and planned, how secondary and tertiary markets depend on primary source areas for visitors, and how that changes demand for labor in restaurants, hotels, event centers and related businesses. The variety of restaurants in any area (think of Napa County, both upvalley and downvalley, Healdsburg, the town of Sonoma and Sausalito, for example) is defined by visitor flow. Local residents provide a revenue drumbeat, but visitors provide an amazing additional layer. Once visitors stay overnight, more revenue is available.

This first graph shows recent data on occupancy rates at regional hoteliers, a simple but effective metric of demand to visit an area. In these comparison areas, occupancy is not quite back to pre-pandemic (2019) levels, where each year saw its peak demand. The second figure may be more critical to some hotelier operations, which is what revenue is generated per available room (RevPAR) from the supply offered. In the cases of Napa and Sonoma counties, those dollars per room are almost back to pre-pandemic levels, if not more. The problem is how much of that is demand versus inflation pressure; the blend of occupancy rates and RevPAR helps tell a more complete story, though occupancy rates are part of the RevPAR calculation.

The wine industry is a key part of these strategies in Napa and Sonoma counties as well as Mendocino and Lake counties. Marin and Solano counties are more nascent regarding wine-industry connectivity with tourism but have seen some growth. The North Bay’s proximity to the Bay Area (sharing “Bay” in the regional names) leads to natural connections between the two regions, including sharing visitors. Rural, outdoor attractions also bring tourists to the North Bay, some combining trips with visits to San Francisco, Oakland, San Jose and other parts of the more-populated regional cities. As the North Bay’s infrastructure to service visitors expands, including more airport and rail services, this region should prepare for more visitors.

The puzzle is: Does this region want more visitors while seeking ways to be attached to the global economy? Concerns over land use, housing use, water use, costs of visitors versus their benefits for local residents and governments, and traffic are all topics when new hotels or visitor facilities are debated. Technology firms, life sciences and biotechnology, medical devices and professional services with local headquarters may provide that foundation, but will their vendors and partners come?

One strategy for balance is to look at industries that bring in visitors worldwide while generating products and services sold worldwide. We need to support visitor strategies because they are this region’s portal to the world economy and support many local small businesses that would not survive without that additional revenue.