NYC Tourists Expected To Generate $4.9 Billion In Tax Revenue For The City

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by Tyler Durden
Saturday, May 25, 2024 - 12:00 AM

While residents and businesses continue to pour out of New York City in favor of tax-friendlier locations, tourists appear to be doing all the heavy lifting in helping the city raise tax revenue. 

Now, revenue generated by tourists is higher than it was pre-pandemic, with Bloomberg reporting that the 62.2 million people who visited New York City last year were expected to post a record $4.9 billion in sales and other tourism-related tax revenue.

This marks a 16% hike from 2020, which has been driven by - you guessed it - higher prices. 

The pandemic, which started in early 2020, severely impacted New York City, collapsing the office and retail sectors and driving many residents to relocate to the suburbs or other states. However, the city has been witnessing a gradual economic revival, marked by the return of visitors to Broadway, museums, and other attractions, Bloomberg writes.

Despite initial hopes by tourism officials to exceed pre-pandemic visitor numbers this year, a slower recovery in international travel has postponed these expectations to 2025. By then, the city anticipates welcoming 68 million visitors, according to state Comptroller Thomas DiNapoli.

International tourists, who constitute about 20% of the city's annual visitors, saw a dramatic 82.2% decline in 2020, dropping to 2.4 million mainly due to severe travel restrictions and a significant decrease in visitors from China, where the virus first emerged. Last year, this number recovered to 11.6 million, though it remains 14.1% lower than pre-pandemic levels.

Domestically, U.S. tourists have been the main drivers of the recovery, with 50.6 million visiting the city last year, a 7% increase over 2022. However, business travel, including both domestic and international, is rebounding more slowly than leisure travel. It decreased to 400,000 in 2021 from 3.4 million in 2019, and has since climbed to about 2.3 million, the report says. 

Furthermore, the New York City tourism sector is still experiencing a shortfall of approximately 30,000 jobs, down 10.4% from its pre-pandemic strength, as per DiNapoli's report.

Despite these challenges, New York continues to be the premier U.S. tourist destination. In 2023, it led with 33 million overnight visitors, outpacing Las Vegas and Los Angeles, which attracted 26 million and 21 million overnight visitors respectively.

DiNapoli concluded: “The industry’s full recovery won’t be complete until we see a full return of international and business travelers. Our city and state leaders need to focus on keeping New York a desirable and safe destination for individuals and families from around the world.”