Major Cities Value Tourism More as Office Vacancies Remain High

25.08.2023 - 13:44 / skift.com / Dawit Habtemariam / Eric Adams / Corinne Menegaux

Some large cities are increasingly leaning on rising tourism as a way to make up for a hybrid worker model that has undermined the economies of their central business districts. 

Projections released on Wednesday suggested that several urban centers are only going to see greater benefits from visitors. Paris’ travel and tourism sector will rise in value from $36 billion to $49 billion over the next ten years, the World Travel and Tourism Council said. New York’s will rise to $21.73 billion from $12.4 billion.

The recovery will be uneven, though. In 2023, the tourism sector worldwide is forecast to reach $9.5 trillion, just 5 percent shy of its 2019 level, according to a new report from the tourism body with help from the consultancy Oxford Economics. Yet the gains won’t be evenly spread around. While several major cities have already surpassed their prepandemic levels, most remain below.

Every bit of economic juice will help plug the shortfall. During the pandemic, many workers deserted their city offices and adopted remote work. Since then, they’ve been reluctant to resume long commutes. Some of them simply can’t return because they’ve moved out of the city to work remotely in smaller cities, such as Chattanooga, Tennessee.  

In February, office vacancy hit a new post-pandemic record for Washington D.C., New York, San Francisco, Philadelphia, and six other large U.S. cities, at 50.4 percent. In major European cities, the office return is inching closer to the pre-pandemic level average of around 70 percent, according to Savills, a commercial real estate firm. 

The norm for many knowledge worker jobs is currently a hybrid mix of office and remote, where workers spend two to three days in an office or coworking space.

“One hundred percent remote work doesn’t exist so much, finally — except for specific companies,” said Corinne Menegaux, managing director of Paris Convention and Visitors Bureau. 

City mayors are urging their large employers to mandate workers come back. New York Mayor Eric Adams has urged Wall Street firms to return to downtown Manhattan. The city is losing over $12 billion in worker spending, Bloomberg News reported.

In her inaugural address, Washington D.C. Mayor Muriel Browser called on the Biden Administration to get federal employees back in their offices. The federal government represents one-quarter of DC’s pre-pandemic jobs and owns or leases one-third of DC’s office space, Browser said.

When Biden released new back-to-office guidance to federal employees, the U.S. Travel Association applauded the move. Such workers are “vital to strengthening urban centers, making these communities more attractive to visitors,“ said Tori Emerson Barnes, executive vice president of public