Phoenix tourism in recovery mode

Posted 4/22/22

Phoenix tourism is in a recovery phase and looks to be in better shape overall than other areas around the U.S. despite a recent report that says the hotel business travel segment is down. The …

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Phoenix tourism in recovery mode

Posted

Phoenix tourism is in a recovery phase and looks to be in better shape overall than other areas around the U.S. despite a recent report that says the hotel business travel segment is down.

The report, released by the American Hotel & Lodging Association and Kalibri Labs, said U.S. hotel business travel revenue is projected to be 23% below pre-pandemic levels during 2022. The forecast means the industry would end the year down more than $20 billion compared with 2019.

The report comes after hotels lost an estimated $108 billion in business travel revenue during 2020 and 2021 combined, the report said.
However, some local industry officials say there has been a recent uptick in business travelers.

Experience Scottsdale works with hotels, resorts and art galleries to promote both Paradise Valley and Scottsdale as a tourist destination.
The office continually targets people who will “most likely” want to visit the area.

“While the meetings market has not returned to pre-pandemic levels, group meetings are increasing, and we are seeing leads for larger meetings as well. All good signs for the industry’s continued recovery,” said Rachel Pearson, a spokeswoman for Experience Scottsdale.

Overall, 2021 numbers for leisure and business travel were “off-pace” from 2019, Experience Scottsdale officials said.

On an annual basis, Scottsdale welcomes 11 million visitors, including 1.7 million international travelers.

Pearson said the Scottsdale area’s occupancy is 68.1% from January to March 2022. That was a 40% increase over 2021.

“We continue to see strong hotel rates helping to lift revenue above the levels seen before the pandemic,” Pearson said. “While summer remains a slower season, we are forecasted to see continued year-over-year growth and are excited to welcome back international visitors as well. Experience Scottsdale has continued to educate travel professionals from key international markets to help encourage travel to Scottsdale as flights resume. In addition, we increased marketing not only in key target markets but also emerging markets for the destination, helping to drive new and repeat visitors to Scottsdale.”

The report said leisure travel is expected to return to pre-pandemic levels this year.

But business travel — which includes corporate, group, government, and other commercial categories — is the hotel industry’s largest source of revenue and will take “significantly longer” to recover.

“While dwindling COVID-19 case counts and relaxed CDC guidelines are providing a sense of optimism for reigniting travel, this report underscores how tough it will be for many hotels and hotel employees to recover from years of lost revenue,” said Chip Rogers, president and CEO of AHLA. “The good news is that after two years of virtual work arrangements, Americans recognize the unmatched value of face-to-face meetings and say they are ready to start getting back on the road for business travel.”

What’s the good news for Phoenix? Overall, the Valley’s tourism industry is improving.

According to the Arizona Office of Tourism, the state visitor spending estimate for 2022 is $2.3 billion — 10% higher than 2021, but 32% below the benchmark year of 2019, said Joshua Coddington, spokesman for the Arizona Office of Tourism.

“Overall direct spending estimates are increasing, but are still far below the March 2019 peak,” Coddington said. “This shows that while demand for leisure travel is strong, the overall industry is still working to recover. Segments including business, group, meetings, conventions travel and international travel are going in the right direction, but still have a ways to go to recover to pre-pandemic levels.”

Economist Danny Court says Phoenix being located in warmer conditions help.
In Scottsdale, www.ItsThatHot.com offers resort rates from as low as $111.

“There’s lots of different markets that are well below where they were in 2019,” Court said. “(The Phoenix area) is 6% below what (it was) in 2019. The weather and sunshine are certainly playing a factor.”

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