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Valley leaders tout study quantifying impact of tourism downturn

You don’t have to work at a resort or sell souvenirs to be hurt by the downturn in Arizona’s tourism industry, a group of Valley leaders said Sept. 22.

“Do you know a teacher, a police officer, a firefighter, a librarian?” Phoenix Mayor Phil Gordon said. “They’re all dependent on tourism because of the sales and property tax it provides.”

Gordon and other leaders called a news conference to tout a Greater Phoenix Convention & Visitors Bureau study showing that Phoenix hotels generate $169 million in tax revenue each year.

Visitors to Arizona spent an estimated $18.5 billion last year, a drop from $19.1 billion in 2007 and slightly behind the $18.7 billion reported in 2006, according to the Arizona Office of Tourism. Gordon said it’s important to keep in mind that a drop in visitor spending hurts the ability of state and local governments to deliver services.

“For those of you that aren’t directly involved in the hotel or convention industry, let me say that you’re within one degree of separation,” Gordon said. “And in today’s fragile economy that makes you a partner.”

The report follows the release last week of an Oxford Economics USA study suggesting that every dollar companies spend on business travel returns $12.50 in gross value in terms of adding business, keeping customers, making sales and other factors. The study noted that roughly half of companies have cut travel during the economic downturn.

Scottsdale Mayor W.J. “Jim” Lane said he hopes businesses take heed of the report. He said Scottsdale in particular is suffering from the “AIG effect,” a reluctance among companies to hold off-site meetings in part because of publicity surrounding the actions of American International Group Inc. after receiving a taxpayer bailout.

“We need to get past that,” Lane said. “We’re proud in Scottsdale, as I know across the Valley, of our tourism product that we provide and what its real contribution is to both our economy and the business world in general.”

Tourism has a $3.7 billion annual economic impact in Scottsdale alone, Lane noted.

Kathleen Andereck, director of Arizona State University’s School of Community Relations and Development, said tax revenue generated by tourism has an impact that might surprise many.

“In all of the ways in which taxes benefit the general population, that’s the way tourism is contributing, and at a different level than most people recognize,” Andereck said in a telephone interview.

Sherry Henry, executive director of the Arizona Office of Tourism, said that dollars generated by tourism can have a profound indirect effect not only on tax revenues but on the revenues of other businesses.

“When a tourism-related business is hurting, it can have a negative impact on its suppliers and later the employees of those suppliers,” Henry said in a telephone interview.

One comment

  1. A few years ago I stayed at the Wyndham in Phoenix. I had a great time, I must admit.
    I’m from New Jersey and I work for a big pharmaceutical company in Northern New Jersey. This year while the company was planning our annual convention; They asked for any suggestions employees may have for possible destinations.
    I suggested Arizona but unfortunately management, had recently hosted events at Phoenix and to my surprise held a real negative opinion about the area. They mentioned Arizona as a placed to be avoided at all cost. Hotels and restaurants were short of help. Residents of Phoenix were mean to visitors and not accommodating. Racial tensions were also mentioned.
    I hope this help.

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