Leisure/hospitality sector picking up

Pasadena Star News 
By: Cynthia Kurtz
Posted 5/15/2013  

When the temperature hits 100 degrees, we all start thinking about vacation - where to go and what to do. Being a tourist is great fun. 

Tourism also provides a big boost to the local economy. It is an industry that brings dollars into a city and region and creates jobs without being a big drain on local services. Yes, a big event requires extra police and fire but most large events cover those costs not the local budget.  

When the recession hit in 2008, hotel and tourist spending took a huge plunge. With dwindling discretionary dollars, families decided to travel less and recreate closer to home. The "staycation" was invented. Conferences and travel were the first line items to get axed from business budgets. But recent economic studies show that individuals and businesses “can’t wait to get back on the road" again. That is good news for the San Gabriel Valley.

Half of the new jobs created in the San Gabriel Valley in 2011-2012 were in the leisure and hospitality sector - 3,000 new jobs. Retail trade, which also benefits from tourist spending, was second adding 1,800 positions.

Last week the Pasadena Center Operating Company (PCOC) released a report that demonstrated how important tourism is to our local city economies. PCOC oversees Pasadena's conference center, visitors’ bureau and historic auditorium. They hired an independent hospitality consulting company (PKF Consulting) to look at the economic impact from overnight visitors.  

PCOC was interested in whether tourism was rebounding and if their expanded convention center which opened in 2009 was having a positive economic impact. The answer to both questions is a resounding yes.

PFK Consulting found that in Pasadena between 2009 and 2012, occupied hotel and motel room nights jumped by 15.5 percent, number of nights out of town guests stayed in private homes grew by almost 10 percent, and total visitors days increased by just under 13 percent.

Translating those visits into dollars and cents creates some big numbers. Direct visitor spending in 2011 equaled $365.7 million. The total economic impact of tourism to the City of Pasadena is estimated to have been $475 million.

Congratulations Pasadena and PCOC. Keep up the good work.

With summer almost here and everyone thinking about fun and vacations, you can find out what is happening at the Pasadena Convention Center and venues around the San Gabriel Valley by logging onto www.DiscoverSGV.com. The calendar will guide you to the best of the best activities for you, your family, and your out of town guests.  And you will have the satisfaction of knowing you are helping the local economy.

 

Immigration decline to affect boomers

Pasadena Star News

By: Cynthia Kurtz
Posted 5/07/2013
 

The “Baby Boomer” generation, of which I am a card carrying member, has been disrupting the world for 60 years. Between 1946 and 1964, the years generally defined as the Boomer generation, 75.8 million Americans were born.

The sheer size of the Boomer contingent meant that there weren’t enough schools, houses, roads or just about anything else. Because of the Boomers, education became a national priority, the suburbs were born, and houses were redesigned to add “family rooms”.

Boomers fought for civil rights, defined the “60s” and were generally responsible for the economic growth of the 1990’s using their disposable income for entertainment, electronics, luxury goods, and travel.

So it was no surprise when Dowell Myers, professor of policy, planning and demography at the USC Sol Price School of Public Policy told the audience at the San Gabriel Valley Economic Partnership’s 2013 Forecast that we are about to experience a soaring senior ratio... after all a Boomer turns 50 every 7 seconds. However, it was the other news from Professor Myers that surprised the audience and made the Boomers in attendance a little nervous about how their “golden years” were going to work out.

For decades demographic projections have predicted continued population growth in the country and in California. We knew that families were getting smaller but we thought there were more families and it would work out. We believed our real ace in the hole was immigration. People were moving here from foreign lands and from other states. In fact, immigration was expected to accelerate.

The reality is much different. You may be thinking to yourself, well we just had a recession so of course we had a slowdown in immigration but that will change as the recession ends. That would be a good theory if the decline in immigration rates had begun when the recession began.  

Not so. Annual net immigration to Los Angeles County peaked in 1990, peaked in California a few years later and began to decline in the U.S. in the early 2000’s long before the recession started.

The magnitude of that change is startling. Just five years ago, in 2007, the California Department of Finance projected that Los Angeles County would reach 12 million people in 2030. In 2013, their new projection is that the 12 million population number will be reached at least 30 years later - sometime after 2060. 

Okay, maybe this is a good thing -- Less traffic, less development, easier to get into our favorite restaurant. But there is that point Professor Myers made about the soaring senior ratio.  

The percentage of residents age 65 to 74 is growing in almost every city in California including the San Gabriel Valley. We Boomers are expecting to sell our homes, collect our Medicare, and enjoy the good life. However, that requires a younger, more productive workforce that can buy our homes and pay for those services. With a declining native growth rate and reduced immigration that workforce isn’t being nurtured in the numbers California must have to maintain a vibrant economy.  

It is very clear what Boomers must do. We need to fix the immigration policy. We need to give foreign students who are educated at our great SGV schools the opportunity to build their businesses here. We need to invest in training our youth to enhance their skills and productivity. And we need to make it easier to operate businesses in this state so businesses can create jobs. Come on - we’re the Boomers - we can do this.

 

Partnership strongly supports A.B. 1257

Pasadena Star News

By: Cynthia Kurtz
Posted 5/01/2013

Butcher, baker, policymaker - a California legislator has a lot of jobs. Constituents pay close attention when the Legislature is spending money or debating new regulations but when the discussion is about a new policy the hearing room is often empty.   

Policy bills get a back seat because usually they don’t dramatically affect us immediately. When there are so many issues that need immediate attention, our natural instinct is to gloss over those that we think can wait. But each day the future is being formed and that is precisely why it is so important that we try and set good policy now.

 

A case in point: We all recognize that natural gas plays an important role meeting California’s energy needs, that it is a clean fuel, and that we aren’t dependent on non-friendly foreign countries to supply it.  The National Regulatory Research Institute, the research group for public service commissioners who regulate state utility services, recently issued a report saying, “As California transitions its energy infrastructure to one that is more environmentally friendly, natural gas holds promise as a fuel that can complement the state’s cap-and-trade program, energy efficient measures, and transition to renewables.”

It sounds great but California lacks a long-term strategy for maximizing the benefits of using natural gas and without a blueprint, without a policy, opportunities will be missed. 

To remedy that omission, the San Gabriel Valley Economic Partnership supports AB 1257, the Natural Gas Policy Act, authored by Assemblymember Raul Bocanegra. It would require the state to develop a long term strategy to maximize natural gas as an energy source. Among other uses, the Act calls for assessing strategies to use natural gas as a transportation fuel. To date the use of natural gas in Southern California is dramatically reducing harmful emissions, removing the equivalent of 525,000 gasoline powered cars off the roads.

AB 1257 requires the California Energy Commission (CEC) to prepare a report identifying how to optimize the advantages of using natural gas in meeting the state’s energy needs by January 1, 2015 and then update that report every four years. 

This should help drive the development of not only natural gas but other renewable fuels as well.   According to the Center for Strategies and International Studies (CSIS), a bipartisan public policy research institute, natural gas “is an essential partner to the development of renewables, providing cleaner, reliable backup power when the sun is not shining or the wind dies down.”

There are long term benefits for our economy. California companies filed 41 percent of all patents for renewable-energy innovation nationwide from 2008 to 2010. Natural gas is a component of the renewable industry and a comprehensive natural gas policy can attract new business and clean-tech startups to California, injecting new life into the state’s reputation as a center for innovation.

According to the 2009 Global Insight report, the natural gas industry can become a booming sector that can bring important investment capital and major technology companies to California. Just like California’s clean tech industries attracted a record $3.5 billion in venture capital in 2011, California’s natural gas industry can also attract venture capital. And a policy that commits to a long term plan to maximize the benefits of natural gas will help attract more capital.

Let’s make sure we have the right policy, like AB 1257, in place.

Technology fuels need for new skills

Pasadena Star News

By: Cynthia Kurtz
Posted 4/10/2013

  

There are many ideas about what we can do to boost the economy-investing in infrastructure, controlling inflation, improving access to capital and getting our national debt under control are just some of the proposals being considered. However, I believe there is something else we should tackle first. 

We are experiencing a global technology revolution. It is a revolution that is going to have as far-reaching impacts as the printing revolution which transformed the way we communicate and the industrial revolution which reengineered manufacturing. 

What is the technology revolution changing? Everything. Whether it is genomics, cloning, bioengineering, smart manufacturing, nanotechnology, big data, or how we watch TV, there isn’t anything that isn’t being impacted by technology. Every product, every transaction and every service is changing.

Previous revolutions took 50 to 60 years. This one is happening seemingly overnight. Every day there are new business doing new things and needing people trained and ready to fill the new jobs. 

The technology revolution is also changing what job skills businesses need. Many lower skilled jobs are being eliminated and higher skilled jobs are being created requiring retaining for older workers and a better educated youth workforce.

We have known for some time that high unemployment and education are related. In 2012, individuals without a high school diploma had a 12.4 percent unemployment rate and a median annual salary of $24,400. Employees with an Associate’s Degree had a 6.2 percent unemployment rate with a median annual salary of $40,800. The technology revolution will increase this education gap.

A few week ago Encino Advisors, LLC, an economic consulting firm based in Davis, CA released a report entitled “Left Out, Left Behind: California’s Widening Workforce Training Gap.” The report was commissioned by Corinthian Colleges, Inc., based in Santa Ana, CA.

The report concluded that “increasingly individuals need post-secondary education and training to secure and maintain employment. New jobs especially in the primary growth industries require new skills. Further there will be an insufficient number of skilled workers to fill the available jobs.”

This seems like the perfect role for community colleges. While CCs are well positioned for providing skill based training, the study found that there is a “significant gap between demand and supply for career education in California.” They concluded that more than two million Californians will go unserved by the state’s community colleges in the next decade. 

Last Sunday this newspaper ran a story on how difficult it is to get a community college degree. Kelly Puente reported that “the traditional two-year (community college) stint has ballooned into six years and beyond as they struggle to transfer and graduate.”

Think about what this means. Millions of Californians looking for work while good positions go unfilled. Building our economy recovery plans around fixing these education gaps is a path for success.

Retailers pull out stops to lure shoppers

Pasadena Star News

By: Cynthia Kurtz
Posted 4/03/2013

 
California sales were up 6.1 percent for the fourth quarter of 2012 (October to December) compared to the same period in 2011 according to a recent report released by HdL Companies, an economic data analysis consultant located here in the SGV serving 360 clients in six states. That is good news since consumer spending is a key to economic recovery. 

For retailers the fourth quarter numbers that matter are general consumer goods spending. Holiday sales often make or break the whole year for a retailer and they also received good news with receipts up by 4.3 percent over 2011.

Year to year comparisons alone don’t tell the story about what is happening inside retail. Things are changing quickly. Looking at the 2012 holiday trends gives us a glimpse of how shoppers are dictating what they want before they will part with their hard earned dollars. 

Starting Black Friday and continuing throughout holiday shopping season, brick and mortar retailers offered expanded hours including being open on holidays, opening as early and 8:00 am, and closing well into the wee hours. While some consumers expressed concern about the nontraditional hours, many retailers concluded it was a good move.

At least in part the expanded hours are in reaction to the explosion of e-commerce competition. On-line shopping increased as much as 17 percent over 2011 while in-store sales declined by 2 percent.

One way traditional stores are attempting to adapt is by merging the on-line and in-store experiences so they complement rather than compete against each other. Until recently a shopper could often find different merchandise, pricing and specials when shopping in the store and on-line with the same retailer. It was confusing and frustrating. Retailers quickly realized a confused or frustrated shopper was an ex-shopper.

Meshing the two experiences so a shopper can order the merchandise on-line and pick it up at the store or order at the store for home delivery is quickly becoming the norm. The combined showroom/on-line experience gives shoppers more choices.

Free shipping is a must during the holidays and a few retailers are finding that continuing it year round helps blur the in-store versus on-line experience. The message is “how can we help you make the decision to buy whenever and wherever you wish?”  And it seems to be working.

Hype also helps. Conventional wisdom use to be that big specials should be kept secret until that day of the sale. Otherwise they would hurt pre-sale sales. But getting shoppers excited seems to be edging out the surprise sale. Shopping is a social experience often planned with friends and family, like going to the movies or sporting event. Advance advertising makes shopping “the event.”

Comparing prices, especially on large ticket items, use to be labor intensive but apps have changed everything. With the flick of a finger, a shopper can know everything about competitors’ prices without ever leaving the store. What is a savvy retailer to do? Match or beat the competitors’ price, of course. 

Gift cards use to be common for durable goods but now consumers want cards for groceries, coffee, entertainment and dining. Considered more appropriate than giving cash...even though they are basically the same thing... today gift cards are the number one requested gift and retailers are ready to accommodate.

Once again the Consumer is King.