At FireSky Resort and Spa, Jim Hollister’s inbox swelled with e-mails from guests demanding cancellations just after SB 1070 became law.
But the general manager of the luxury resort said business has been pleasantly brisk lately as fewer customers seem fazed by Arizona’s controversial immigration law.
“I was watching carefully how business has been rolling in,” Hollister said. “My summer business has never been better. … So people are traveling.”
SB 1070, which makes it a state crime for an immigrant to be here without documents, triggered a boycott on Arizona’s tourism industry and caused hundreds of hotel cancellations when it was signed into law in April. The hit compounded problems created by the broader economic downturn.
While a federal judge put most of the law’s provisions on hold pending a court challenge, Michael Bidwell, president of the Arizona Cardinals, says it’s time government and business leaders start focusing on how to repair the damage done to the state’s brand.
“If you’re going to work on a branding strategy, you’ve got to have a product that is worth selling,” Bidwell said during a panel discussion at a recent economic forum held by the Greater Phoenix Chamber of Commerce. “We’ve got to have leadership, we’ve got to have a budget and we’ve got to have a PR strategy. … We need to understand we are competing with other regions of the world, and we need to get a game plan.”
Bidwell, who is also chairman of the Greater Phoenix Economic Council, said the state needs a budget for a marketing campaign to promote its positive aspects, like its slew of luxury resorts, top-rated health care system and burgeoning renewable power industry.
Arizona’s tourism industry lost upwards of $15 million when more than 40 groups canceled hotel stays in protest of SB 1070, said Kristen Jarnagin, vice president of communications for the Arizona Tourism Alliance, a nonprofit organization for travel-related businesses. The lost revenue doesn’t include groups that may have considered booking but never made reservations, she said, so the total business lost is likely much higher.
“It’s difficult to know what the long-term impacts will be, because when meetings book, they usually book two or three years out,” Jarnagin said. “So, this could impact us for the next three years.”
Still, Jarnagin expects that the worst of SB 1070′s effect on Arizona’s tourism industry has passed. When the boycott on tourism was rescinded, it was the beginning of the end to the deterioration of the state brand, she said.
“Hopefully this does not set a future precedent for other cities and states and destinations,” Jarnagin said. “It’s definitely something that could hurt innocent people. … When you cancel a meeting or decide not to come to a destination you’re putting housekeepers and bellmen out of work.”
In 2009, there was more than $16 billion in tourism spending, putting over $2 billion in tax revenue into the state and local coffers, according to the Arizona Tourism Alliance.
Even before SB 1070, Arizona’s tourism industry was reeling from the broader economic recession as well as the so-called “AIG effect,” in which large corporations were reluctant to hold lavish resort events after the government bailed out insurance giant AIG.
Brent DeRaad, executive vice president of the Scottsdale Convention and Visitors Bureau, said those existing challenges make it difficult to separate and quantify the impact of SB 1070.
Booking rates in Arizona hotels are up over 2009 as the recession has reversed, but those increases lag slightly behind the national rebound, DeRaad said.
“The number of planners considering Arizona for their meetings right now, that number is smaller than it used to be,” DeRaad said. “In some cases, certainly not all cases, longtime customers are saying, ‘We need to take a little break from Arizona, at least until some of the fury with regard to 1070 dies down.’”
While large-meeting cancellations have been the biggest hit to tourism revenue, the impact of individual visitors now avoiding the state hasn’t caused as severe a financial impact, DeRaad said. That’s because many people are deliberately vacationing here in support of the law, he said.
“The Arizona brand is very strong and it has been for many years,” DeRaad said. “We do certainly think there will be a continued recovery.”
Tourism industry revenue by year:
• 1999: $13.1 billion
• 2000: $14.2 billion
• 2001: $13.4 billion
• 2002: $13.3 billion
• 2003: $14.7 billion
• 2004: $15.9 billion
• 2005: $17.6 billion
• 2006: $18.7 billion
• 2007: $19.1 billion
• 2008: $18.5 billion
• 2009: $16.6 billion