Ec Study 05

Ec Study 05 - Economics of the San Francisco Restaurant...

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Economics of the San Francisco Restaurant Industry 2005 Report Prepared for Golden Gate Restaurant Association By Kent Sims May 2005
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C HAPTER 1 S UMMARY & C ONCLUSIONS 1 1 1.1 T HE S AN F RANCISCO E CONOMY This report presents the Golden Gate Restaurant Association’s (GGRA) annual study of the Economics of the San Francisco Restaurant Industry . Previous reports, prepared in 2002 and 2003, documented industry conditions after the onset of the recent national recession, the dot.com bust, and the 9/11 terrorist attacks. These events produced the most challenging economic conditions for San Francisco restaurants in half a century. The number of arriving passengers at San Francisco International Airport fell 25% between 2000 and 2003, reflecting the sharp drop in out-of-town visitors. Hotel occupancy dropped 20% , average daily hotel room rates fell 16%, and hotel room tax revenue plunged 59% . The number of transient vehicles using City-owned parking garages dropped 13% reflecting the drop in the number of metropolitan area visitors to San Francisco. The City lost 80,000 jobs, nearly 14% of all City-based employment ; the resident labor force contracted 8% ; employment dropped more than 12% ; the unemployment rate rose from 3.4% to 7.0% ; and the number of unemployed residents increased 84 %. The office vacancy rate for Class A space soared from 3.8% in the fourth quarter of 2000 to 21% in first quarter of 2003. Vacant office space of all types rose from 5.2 million sq ft to 20 million sq ft – roughly a 10 -year supply at historic absorption rates. Sales tax revenues, a good reflection of consumer spending in the City, plunged 46%. Median income of table service restaurants plunged 40% in 2001 and another 10% in 2002. In the process, San Francisco suffered a net loss of 298 restaurants and bars, or 6.4% of all such businesses in the City. Economic conditions in San Francisco have improved substantially from the depths of the recession in 2002 and early 2003. However, many measures of economic activity remain well below their level in 2000 before the onset of the recession and the economy in general is smaller than before the recession. The number of arriving passengers at San Francisco International Airport in 2004 was up 6% from it low point in 2003, but still 20% below the level in 2000. Hotel occupancy in 2004 was 4% above its low point in 2002, but still 20% lower than in 2000. Average hotel room rates have declined in every year since the onset of the recession and were 17% below their 2000 level in 2004. Hotel room tax revenue was up 36% from its low point in 2002, but 44% below its 2000 level. All three measures were depressed by an as yet unresolved hotel industry labor dispute.
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C HAPTER 1 S UMMARY & C ONCLUSIONS 1 - 2 The number of transient vehicles using City-owned garages continued to decline in 2004 and was 1.1 million vehicles or 13% below its peak of 8.6 million vehicles in 2000.
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This note was uploaded on 03/08/2011 for the course SLS 2000 taught by Professor Mitchell during the Spring '06 term at FIU.

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Ec Study 05 - Economics of the San Francisco Restaurant...

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