California Tourism Spending Reaches Record $158.9 Billion in 2025

-Editorial 

California’s tourism industry generated a record $158.9 billion in travel spending in 2025, according to a new statewide economic impact report highlighted by Gov. Gavin Newsom, who said the sector continues to play a major role in supporting jobs, businesses, and local economies across the state.

The report found that travel spending increased 1.7% from the $156.2 billion recorded in 2024, reflecting continued growth in the state’s tourism economy despite declines in international visitation during the year.

Tourism-related employment also increased in 2025, with California adding approximately 4,350 travel-supported jobs statewide. The total number of jobs tied directly to the tourism industry reached approximately 1.2 million, representing a 0.4% increase from the previous year.

California’s tourism sector remains one of the state’s largest economic engines and continues to generate significant economic activity across all regions through accommodations, restaurants, transportation, entertainment, retail businesses, and related services.

“California’s economy is built on resilience, innovation, and global appeal, our tourism industry is a powerful example of that strength,” Newsom said in a statement released alongside the report. “We continue to attract visitors from around the world, supporting jobs, small businesses, and communities across our state.”

According to the report, travel-generated state and local tax revenue reached $13.6 billion in 2025, up 3.6% from $13.2 billion in 2024. The increase in tax revenue reflected continued consumer spending on lodging, dining, transportation, and entertainment.

Spending on accommodations reached $35.2 billion during the year, an increase of 2.2%, while spending on food service climbed to $38.5 billion, a 4.6% increase from the previous year. Visitors staying in hotels, motels, and short-term vacation rentals spent a combined $83 billion in 2025, up 2.7% compared to 2024.

The report also showed increased hotel demand statewide, with approximately 1.2 million additional room nights booked in California compared to the prior year. California’s lodging industry outpaced national booking trends during 2025.

Tourism spending extended across multiple sectors of the economy. In addition to accommodations and food services, travelers spent approximately $18.7 billion on local transportation and gasoline, $18.5 billion on retail sales, $17.4 billion on arts, entertainment, and recreation, and $6.5 billion on visitor air transportation.

The report stated that tourism-supported employment included both full-time and part-time positions directly connected to travel activity. The accommodations and food service sectors accounted for the largest share of tourism-related employment, supporting more than 645,000 jobs statewide. Arts, entertainment, and recreation industries supported nearly 309,000 jobs.

San Francisco remained one of California’s strongest tourism markets in 2025. Visitor spending in the city reached $14.2 billion, surpassing pre-pandemic levels and helping fuel economic activity for hotels, restaurants, and local businesses.

The increase in tourism activity was partly attributed to major sporting and entertainment events hosted in California, including the Super Bowl and preparations for upcoming FIFA World Cup matches scheduled for 2026.

The report noted, however, that California experienced declines in international tourism during the year. International visitor spending fell by approximately $1 billion to $25 billion in 2025. The decline was linked to changes in federal economic policies and broader uncertainty affecting international travel markets.

Despite the decrease in overseas visitation, domestic tourism and large-scale events helped offset those losses and maintain overall growth in statewide travel spending, according to the report.

Looking ahead, California leaders pointed to future international events as major opportunities for continued tourism expansion. A separate economic estimate prepared by the Los Angeles Sports and Entertainment Commission projected that the 2026 FIFA World Cup could generate nearly $892 million in economic impact for the Los Angeles region, approximately 50% higher than earlier estimates released in 2024 and 2025.

The estimate also projected more than $230 million in long-term tourism benefits tied to international media exposure from the tournament, bringing the total projected economic impact for Los Angeles County to more than $1.1 billion.

California is also preparing to host the 2028 Summer Olympic and Paralympic Games in Los Angeles, which are expected to further increase international visibility and tourism activity across the state.

The statewide tourism impact report was prepared by Dean Runyan Associates and evaluates the economic effects of travel across California’s 12 tourism regions and all 58 counties. The report measures tourism activity through travel spending, employment, earnings, and tax revenue.

The report also included revised tourism estimates for previous years based on updated data and changes in methodology related to the “Other Travel” spending category for 2022 through 2024. The report noted that some local destinations may report different tourism figures due to varying visitor definitions and data collection methods.

Economic impact reports for California Senate and Assembly districts are expected to be released later in May 2026.