The nationwide recession delivered a heavy uppercut to Arizona’s tourism industry, but state tourism officials are hoping to avoid a knockout blow by leaning more heavily on foreign travelers.
According to a study last year by the Greater Phoenix Convention and Visitor Bureau, Arizona had lost 17,000 jobs in the tourism sector, $2 billion in visitor spending and $167 million in state and local tax revenue since 2007.
While official numbers for 2009 are unavailable, it’s appears the situation has not improved. The Scottsdale Convention and Visitors Bureau reports that in Scottsdale alone, hotels saw a 10 percent reduction in occupancy last year.
The Arizona Office of Tourism hopes it can help keep the industry standing by attracting foreign travelers. The agency reported that 5 million of the 37.4 million overnight travelers to Arizona in 2008 were foreigners. And while the U.S. has seen a decline in international tourism since the tragic events of Sept. 11, Arizona has seen an increase.
The importance of attracting international tourists is difficult to overstate; the U.S. Travel Association estimates that foreign travelers spend an average of nearly $4,500 per person, or four times as much as the typical domestic visitor. Their trips are longer, and they typically spend more money on activities.
“Forty to 50 percent of our business comes from foreign tourists,” says Greg Bryan, general manager of the Best Western Squire Inn near the Grand Canyon’s South Rim, Bryan estimates international tourists spend 75 percent more than domestic visitors.
“It’s a big international vacation for them,” he says. “People make larger purchases when they are on a major trip like that.”
Bryan has worked with the Tourism Office on numerous occasions, attending the agency’s trade shows and putting on his own mini-shows before or after the events. “They do a great job,” Bryan says.
The Tourism Office’s efforts to attract international visitors have focused on trade shows and meetings with travel agencies and media from around the world in an effort to keep Arizona at the forefront of people’s minds as a travel destination. In Germany alone, for example, the Tourism Office says it has generated more than $12 million worth of media coverage, reaching more than 102 million potential consumers.
While Mexico’s proximity and cultural ties make it the largest source of incoming international tourists, overseas visitors tend to come here for longer periods and spend more money.
“Germany and the United Kingdom are mature markets for us,” says Mary Rittmann, director of trade and media relations for the Tourism Office. “They like what Arizona has to offer, the Wild West, the open spaces and resorts, and the weather. France is the market we are seeing the biggest increases in, and they are spending more money here than most.”
Rittmann sees India, China, Russia and Brazil as fast-growing new markets.
Advocates such as Bryan, however, worry the agency’s efforts will suffer for lack of funding. “They need to be funded,” Bryan says. “It’s short-sighted to shrink the supply of water coming in.”
The state earmarked approximately $26 million for tourism in 2009, but that was slashed to about $12 million as the state’s overall budget crisis forced changes. In her new budget proposal, Gov. Jan Brewer called for a tourism budget of about $5 million, a drastic cut.
Contrast that with California, a competitor with Arizona for tourism dollars, which is in the middle of its own budget crisis and still spends approximately $50 million per year attracting tourists to the state.
“It’s been a tough year,” says Rittmann. She and her colleagues at the Arizona Office of Tourism hope that some additional help will come in the form of a new federal law, the Travel Promotion Act. The act will provide money to promote U.S. travel destinations to foreign tourists.
It also creates an independent, nonprofit Corporation for Travel Promotion that will draw revenue from a new $10 fee on foreign travelers who do not already pay visa fees and from contributions from the travel industry.
The legislation, co-sponsored by U.S. Rep. Harry Mitchell, who represents Arizona’s 5th Congressional District, was intended help the U.S. compete with other countries for tourism dollars. It will also educate foreign travelers about U.S. security and entry regulations to make them seem less daunting.
“Tourism is an essential lifeblood of Arizona’s economy,” Mitchell said in his press release after the bill passed the U.S. Senate on a 78-18 vote. “By promoting travel to vacation and convention destinations like Phoenix and Scottsdale, this bill will provide a much-needed boost for our tourism industry and to the thousands of jobs it supports.”
Arizona’s senators, Republicans Jon Kyl and John McCain, voted against the bill. They argued that the federal government is in need of fewer bureaucracies, not additional ones, and that adding a $10 tax to foreign visitors is not the best way to increase international visitation.
The Tourism Office, which lobbied on behalf of the act, hopes otherwise. “If you look at international tourism, it’s very competitive,” says Rittmann. “The U.S. is one of the few countries without a federal tourism agency. I think every state will benefit from it.”
Bryan, from his office in Grand Canyon, agrees. “The return on the investment of every dollar spent is exponential,” he says. “The tourism industry is a multiplier.”