Rebuilding Arizona’s tourism industry

Marketing campaigns and legislation to revive the battered tourism industry are heating up as Arizona looks ahead to summer vacation and beyond.   

To encourage vacationers to start thinking about Arizona, the state Office of Tourism just launched the Year of the Road Trip campaign with tips, guidance and suggested itineraries for Covid-safe summer fun.  

Meanwhile, a number of bipartisan bills to help the industry recover are advancing through the state Legislature. It’s been a devastating year with losses in the tens of billions of dollars, Kim Sabow, president and CEO of the Arizona Lodging and Tourism Association (AZLTA), said during a virtual event to update members about what’s ahead.  

“The U.S. hotel industry suffered its worst year on record in 2020 with an occupancy rate of just 44 percent,” Sabow said. “It surpassed 1 billion unsold room nights for the first time in history.”

She and other tourism groups are calling on employers and employees to contact their legislators to support measures including a bill that would allow for the creation of tourism marketing authorities. 

Lawmakers advance bill to create Tourism Marketing Authorities

The measure would allow Arizona cities and towns to create funding entities to better market their best features to would-be tourists. Twin bills, Senate Bill 1101 and House Bill 2161, would allow for cities and counties to create Tourism Marketing Authorities (TMAs) that collect fees assessed on sold hotel and resort guest rooms. Those fees would then be allocated to cities and counties to use for marketing campaigns. 

If the legislature approves the measure, Arizona would be the 18th or 19th state to adopt such a law, said Brent DeRaad, president and CEO of Visit Tucson, who described the benefits during the AZTLA webinar. Another nine states including Arizona are considering TMA laws to help the ailing industry. 

“This is enabling legislation. If it passes, it doesn’t mean you have to create a tourism marketing authority, but it gives you that ability, it gives you that additional opportunity to go out and control your destiny,” DeRaad said.  

Currently, there are 184 TMAs across the U.S. If approved in Arizona, this could give communities a leg up in competing for visitors, advocates said.   

How it works 

Municipalities of any size and counties with fewer than 2 million residents would be able to form TMAs under the proposed bill. If a majority of hotels in the designated boundaries agree to create an authority district, assessments would be levied on sold hotel and resort guest rooms.

Hoteliers would vote on this assessment and have input on how the dollars are invested. TMAs can only be created if not less than 67 percent of represented hotels and resorts submit a petition to the applicable government body asking for the authority to be established. 

Assessments would be remitted to the Arizona Department of Revenue that would allocate them to applicable communities. The dollar amount assessed would be determined by each authority. 

Destination marketing organizations (DMOs) in jurisdictions with TMAs would use the money for new sales, marketing and promotional projects. DMO boards also would oversee the TMAs, providing performance reports to participating county governments. 

Tourism districts generate more than $420 million annually 

To date, 184 of these agreements have been established in at least 15 states. Among those benefiting are Chicago, Los Angeles, Nashville, New Orleans, Napa Valley, Philadelphia, San Diego, and San Francisco.  

Also referred to as Tourism Marketing Authorities or Tourism Business Improvement Districts, they generated more than $420 million in marketing revenue in 2019, according to statistics compiled by Civitas Advisors, which specializes in the creation of improvement districts.

Benefits 

TMAs provide a number of benefits, according to proponents: 

• More visitors and visitor dollars to participating communities.
• More state, county and municipal tax revenue from visitors.
• More visitor revenue to pay for Arizona education, public safety and health care.
• More jobs
• New visitor marketing, sales and promotion tailored to the participating communities

If approved the districts would probably start up next year.

Marketing dollars pay off tenfold

Before the pandemic, 46.8 million people visited Arizona in 2019 and collectively spent $25.6 billion in the state, according to the AOT. That generated  $3.78 billion in tax revenue that equalled an annual tax savings of $1,400 for every Arizona household and supported 194,300 industry jobs.

Then last year, the industry saw a $10 billion drop in revenues the first six months, said Bettina Nava, AZLTA Government Affairs Committee chair. Job losses rose as high as 50 percent by summer. 

With the vaccine, tourism should come back strong over the next few years but it will take time and investment, Nava said. Every dollar spent is well worth it.  

“For every $10 million invested, there’s a $100 million return on investment that comes back,” she said. 

Find a safe road trip now

For anyone eager to start planning a road trip, the Arizona Office of Tourism (AOT) has put together a list of tips, guidance and socially distant options at AZRoadTrips.com. 

New Arizona road trip ideas will be updated seasonally throughout 2021, so travelers planning road trips are encouraged to check back regularly. To kick off the Year of the Road Trip, AZRoadTrips.com features a special itinerary right now focusing on Arizona bucket list destinations. 

“Having a trip to plan and look forward to provides so many positive benefits,” said Debbie Johnson, director of the AOT. “That’s why we launched Year of the Road Trip, to provide options, with safety and responsibility in mind, to those who are ready to plan their next trip.”