SAN FRANCISCO (KTVU) - The San Francisco Travel Association released a report Thursday saying tourism is expected to reach a record 26.1 million visitors in 2018.
That's up more than two percent from last year. They predict 2019 will be even stronger.
But the concern is those numbers will start dropping if the sidewalks continue to be overrun with needles and people sleeping outside.
"San Francisco is still very much in demand. However, there are warning signs. There are concerns people have about coming to San Francisco," said Joe D'Alessandro, CEO of the San Francisco Travel Association.
A few months ago a medical association cancelled a future convention because of such conditions. But San Francisco Travel says that's the only one so far.
"Right now we are doing well. But if our brand is damaged, in the long term it could be negative for us," said D'Allesandro.
Tourists in union square noticed the problem.
"When I landed at 3 a.m. there were homeless people everywhere in the street. I had just come from New York and it was more eye opening then in New York. They were everywhere," said Melissa Mortimore of Melbourne, Australia,
"We're at Fisherman's Wharf and [there's] four or five different people on every street. It was a shock to us coming from London," said Kevin Turner.
At the Chancellor Hotel in Union Square the staff says homeless or mentally ill people cause disruptions almost daily.
"They come in the lobby, help themselves to the amenities that we offer our guests. Cause a scene. Sometimes our guests are shocked," said Wes Tyler, General Manager of the Chancellor Hotel.
Yet despite the complaints, tourism is thriving.
The Chancellor Hotel says business hasn't dropped. At least not yet.
"We are definitely hearing comments from our guests," said Yyler.
One concern is return visits, whether some tourists will be too turned off to come back someday.
"If it continued, yeah," said Mortimore. "You wouldn't come back?" we asked.
"Probably not. No," she said.
Tourists are expected to spend about $9.5 billion this year.