Two Palm Springs Economies, One Future: Tourism Money Meets a Year-Round Plan

Palm Springs is now running two economic strategies at once. The first is familiar: special assessments on hotels and vacation rentals that fund tourism marketing, a system the city has renewed and expanded for more than a decade. The second is brand new: in May 2026, Visit Greater Palm Springs launched a multi-year Coachella Valley Subregional Economic Development Strategy, followed days later by the Coachella Valley Innovation Alliance, both aimed at building a year-round economy that does not depend on visitor spending. The open question is whether either track reaches the small, locally owned businesses that give the city its character.

Palm Springs' Dual Economic Path: Tourism vs. Diversification

The scale of the dependence explains the urgency. Sean Smith, director of economic development for Visit Greater Palm Springs, put the stakes plainly: one in four local jobs is in the tourism industry, and tourism carried an estimated 9.1-billion-dollar impact across the Coachella Valley, according to figures the organization released alongside the strategy. "It's a great industry for us, but we have a need and an opportunity to diversify our economic base," Smith said.

The city's own economic development framework, published on its municipal website, describes this as a deliberate two-track posture rather than an abandonment of tourism. It commits to strengthening "legacy economic drivers" — enhancing the visitor experience, promoting the Convention Center and events, and leveraging recent investments like new hotels and attractions — while simultaneously seeding new industry clusters in technology, innovation, healthcare and wellness, and the creative economy. The framework states that these diversification efforts "will create year-round high-paying jobs and reduce reliance on seasonal tourism."

That framing matters for readers trying to judge the announcements. The city is not pivoting away from visitors; it is adding a second engine and hoping the two reinforce each other. The tourism base funds much of what exists today, while the diversification strategy addresses what local reporting on the plan calls the region's economic vulnerability, infrastructure gaps, and disparities in economic opportunity.

The Enduring Engine: Tourism Funding Mechanisms

The tourism engine is built on two assessment districts, both documented by the City of Palm Springs. On November 16, 2016, the city adopted Ordinance 1903, establishing the Tourism Business Improvement District. Its purpose, as the city describes it, is to "promote tourism and fund programs that benefit small tourism businesses within our community" — including public event promotion, advertising and marketing, brochure development, and public relations. The ordinance levies a 1% assessment on room revenue, citywide in boundary but limited to hotels of 49 rooms or less.

The second mechanism arrived in 2020. On November 19, 2020, the Greater Palm Springs Convention and Visitors Bureau adopted Resolution No. JPA 2020-005, renewing the Greater Palm Springs Tourism Business Improvement District for a ten-year term and extending the 1% assessment to vacation rentals. Starting July 1, 2021, vacation rental and homeshare lodgings began paying that assessment on short-term stays of less than 28 days. Those funds are directed toward sales promotion and marketing programs for assessed businesses and toward priority projects the bureau sets annually.

Notice who is inside this funding circle and who is not. The assessments flow to marketing the destination and the assessed lodging businesses themselves. A restaurant, a boutique, or a service business that depends on tourist foot traffic benefits only indirectly, and a business whose customers are mostly residents benefits not at all. That structural gap is precisely where the new diversification track begins.

New Horizons: Initiatives for a Year-Round Economy

The new track launched in May 2026, when Visit Greater Palm Springs announced the Coachella Valley Subregional Economic Development Strategy, a multi-year plan developed as part of Riverside County's broader Economic Development Strategic Plan. Local reporting from the Palm Springs Post, echoed by KESQ's coverage, describes the strategy as designed to diversify the Valley's economy, attract investment, and support higher-wage job growth beyond the region's traditional tourism industry.

The 56-page strategy document describes the Coachella Valley as a region entering "a transformative era," and it calls for investment in clean energy, advanced manufacturing, biotechnology, creative media, and sustainable agriculture, alongside workforce development, housing, digital connectivity, and environmental projects such as Salton Sea restoration. Smith framed that environmental piece as economic policy: "Hopefully at some point it can be an asset, not a liability for our economic development and economic health overall."

Days later, Blue Zones Project Palm Springs announced its support for the Coachella Valley Innovation Alliance, an initiative focused on connecting entrepreneurs, innovators, and community leaders through a series of public events across the Valley. The Palm Springs Post's reporting connects both efforts to a growing emphasis among civic and business leaders on reducing reliance on seasonal tourism while creating more opportunities for residents to work and build businesses locally.

For the city's small "mom and pop" businesses, however, the announced strategy is a framework, not yet a delivered program. The plan acknowledges disparities in economic opportunity as a regional challenge, and the city's framework envisions attracting entrepreneurs and remote workers through a tech and wellness ecosystem — but the specific programs, funding sources, and timelines that would reach an existing independent retailer or family-run restaurant are what those businesses will be watching for.

Palm Springs' Dual Economic Strategy: A Comparative View

Read side by side, the two tracks show how the city simultaneously sustains its visitor economy and bets on a local-first future. The contrast below sorts each approach by its driver, goal, mechanisms, and beneficiaries.

The comparison exposes the tension at the heart of the city's moment. Tourism dollars are mandatory, pooled, and professionally marketed; diversification dollars are, so far, aspirational. The TBID renews through 2030 with a guaranteed revenue stream, while the new strategy's success depends on whether announced investment targets turn into actual programs.

Navigating Palm Springs' Economic Future: A Call for Local Resilience

Palm Springs' economic future hinges on successfully balancing its established tourism industry with the growth of diversified, year-round local businesses. The two tracks can coexist — the city's own framework says as much — but only if the diversification strategy produces concrete support for the independents who currently sit outside the tourism funding circle.

The measurable indicator to watch is the sustained presence and growth of "mom and pop" businesses, alongside the successful implementation of new economic development programs like the CVIA and increased access to capital for local entrepreneurs. The CVIA's public events across the Valley are the first dated, observable test: whether the entrepreneurs who show up are the same people who own the shops on Palm Canyon Drive.

Sources

• Visit Greater PS launches new strategy diversifying Valley economy beyond tourism - OneFutureCV
• New Palm Springs-based initiatives aim to reshape Valley economy beyond tourism ⋆ The Palm Springs Post
• Economic Development Strategic Plan Framework (EDSF) — Palmspringsca
• Tourism Business Improvement District (TBID) — Palmspringsca