The local tourism industry received welcome news when reports from Tourism Economics showed tourism in the “Greater Niagara” region broke records in 2023, outpacing pre-pandemic levels.
It’s an important milestone, showing the industry has built its way back from the Covid-19 pandemic that threw the industry into a tailspin.
The view from the balcony of the former Hotel Niagara, which is under renovation in Niagara Falls.
Much of the gains can be attributed to inflation, which has pushed everything from restaurant meals to hotel nights up in price, but an influx of new visitors bumps the numbers up as well.
But even after adjusting the numbers for inflation, tourism spending across both Erie County and the five counties that make up the Greater Niagara region is still up by 11%. The Greater Niagara region covered in the report includes Erie, Niagara, Genesee, Orleans and Wyoming counties.
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Tourism is important to Western New York’s economy and is an important source of tax revenue. Last year, the report calculates, taxes on the tourism industry shaved $726 off the average household’s tax bill in the Greater Niagara region.
Tourism officials said they have watched tourism in the region make a comeback, and it’s nice to see numbers bear that out.
“I’m so excited, but I’m not surprised,” said Patrick Kaler, president and CEO of Visit Buffalo Niagara, Erie County’s tourism bureau.
Kaler has been keeping an eye on metrics from Smith Travel Research, which tracks hotels. As of June, the average daily hotel rate in Erie County is $140.95, up 32.5% over 2019, easily outpacing the 19% increase in consumer prices during that period, according to Smith.
“Our hotel rates are higher than they’ve ever been,” Kaler said.
Spending on food and beverages made up 39% of tourism spending in the region, while lodging comprised 18%. Retail and service stations made up 19% of spending, totaling $713 million.
“A lot of it is just the price of things have increased, and so that’s playing into it,” Kaler said. “As you know, cost of food and restaurants and just even at the grocery store is higher. So those numbers just continue.”
But other factors are at play as well, Kaler said.
Hotel occupancy has grown year over year, even though there are fewer rooms for rent, with the Buffalo Grand Hotel going offline. In addition, the region saw a bump in business traffic in 2023, Kaler said.
“Last year happened to be a very strong meetings and conventions year for us because many of the conventions and meetings that were scheduled for 2021 were pushed into 2023 because a lot of things had already been on the books for 2022, but 2023 was an open year,” Kaler said.
Attendance records were smashed as well.
More than 306 million people visited New York last year, up 5.2% from last year. That surpasses the 266.8 million tourists that visited the state in 2019, before the Covid-19 pandemic began.
“We’re seeing more visitors coming into our destination,” Kaler said.
The reopening of the expanded Buffalo AKG Art Museum to record crowds likely was a significant contributor to the jump in tourism spending in Erie County last year.
The report doesn’t indicate where the spending increase came from, but the reopening of the expanded Buffalo AKG Art Museum to record crowds likely was a significant contributor to the jump in Erie County. That’s a feather in Erie County’s cap, where tourism spending was responsible for 64% of the region’s tourism sales.
“We’ve had fantastic national and international press on that,” Kaler said. “And it’s not just telling the story of the Buffalo AKG, but it’s telling a destination story as well, so that’s piquing people’s interest in coming to Buffalo.”
It has expanded into some of the region’s growth potential markets as well, pulling in more people from Chicago, Boston, Philadelphia and Washington, D.C., he said.
“They come, they spend more time, which means they also spend more money,” Kaler said.
Jobs related to the tourism industry have not yet rebounded to pre-pandemic levels, Kaler said, but he’s hopeful they are on the right track. Niagara County was the most dependent on tourism employment, with almost one in four jobs attributed to it. Erie County produced the most tourism-related employment, with 28,650 jobs, according to the report.
Tourism in the Greater Niagara region generated $1.2 billion in direct labor income and $1.9 billion including indirect and induced impacts, according to the Tourism Economics report.
A Maid of the Mist boat passes near a rainbow at the base of American Falls as it carries tourists along the Niagara River in July. Tourism in the Greater Niagara region generated $1.2 billion in direct labor income last year, according to a report.
John Percy, president and CEO of Destination Niagara USA, said workforce development has been a challenge. The tight labor market over the past few years has pushed up wages and increased the competition for workers, giving them more choices than they may have had before the pandemic.
Retiring baby boomers who are not ready to stop working are a perfect fit for tourism, he said.
“I think we can be that industry that could welcome retirees that are looking for that fun second, third, fourth, career move, and that could help supplement and benefit our industry greatly,” he said.
International tourism has been slow to come back, but it has begun to rebound and is expected to be back in full force by 2026, Percy said.
“We have already started to see that. You can see it visibly,” Percy said. “You can see it in our visitor center, and you can see it in the numbers and talking to our international tour operator partners, business is moving and returning very quickly.”
Percy predicts more good numbers for 2024.
“Just looking at the numbers thus far through August, everything still remains strong,” Percy said. “Our hotel numbers are up consistently month after month, and that’s a good indicator, talking to our hospitality partners, that our attractions are either flat with last year or up over 2023.”
In 2023, visitor spending grew to $3.758 billion in the Greater Niagara region, growing by 11% compared with 2022. Erie County saw $2.4 billion in direct tourism spending.
Looking at pre-pandemic levels, direct spending in Greater Niagara was $2.828 billion in 2019, which equates to $3.375 billion in today’s dollars. That means last year’s spending, after adjusting for inflation, was up 11% compared to 2019.
Local numbers mirror state ones.
Overall spending in New York State hit $88 billion last year, up 8.4% year over year when adjusted for inflation. That contributed $11 billion to state and local tax coffers.
In 2019, before the Covid-19 pandemic rocked the industry, tourism spending pulled in $73.6 billion. In today’s dollars, that’s $87.9 billion, just under last year’s take.
“We are really just exceeding records when it comes to drawing people to our state,” Gov. Kathy Hochul said at a news conference from the Great New York State Fair Wednesday.
