Record Tourist Visits Generated $22.7 Billion for Arizona Last Year Article originally posted on AZ Central on July 24, 2018 Arizona’s hotels, motels and other lodging venues hosted a record number of visitors, who spent a record amount of money last year, according to new research from the state’s Office of Tourism. A strong economy, moderate gasoline prices, expanded international air routes and an aggressive marketing campaign helped lure visitors to Arizona. The state welcomed American and foreign visitors who had 43.9 million overnight stays in 2017, collectively spending $22.7 billion and directly supporting 187,000 jobs — largely in hotels and restaurants. The state doesn’t track the actual number of tourists but rather overnight stays, spending and related data. Tourism spending equated to about $62 million a day. Visitors tended to stay nearly four nights each on average. Recent announcements that the Super Bowl will be held here in 2023 and the Final Four of the NCAA men’s college basketball tournament in 2024 bode well for the state’s long-term travel potential. Sporting events boost awareness Those sort of sporting events, along with Cactus League baseball, the Waste Management Phoenix Open golf tournament and NASCAR racing “give people a great look at Arizona,” said Debbie Johnson, director of the Arizona Office of Tourism. “We couldn’t afford the advertising for that kind of exposure.” Visitor spending in Arizona has steadily climbed every year since 2009, when the economy began to emerge from recession. The nearly 7 percent rise in 2017 was the biggest spending increase in more than a decade. Of the 43.9 million overnight stays, tourism officials estimate Americans accounted for 38.3 million of them and foreigners, the rest. The domestic total includes Phoenix-area residents who traveled at least 50 miles to other parts of the state and stayed overnight. In fact, Arizonans accounted for roughly one in four overnight stays overall. “Cheap gas is good for road trips and good for tourism,” said Colleen Floyd, director of research at the Office of Tourism. The visitor totals don’t include lodging in private homes, whether arranged among friends and family members or through Airbnb or other booking services. Competitive, supply concerns The advent of Airbnb-type services is a potential threat to Arizona’s traditional hotels and motels. However, the impact “isn’t evident at this point to any dramatic degree,” said Robert Hayward, senior vice president in the Scottsdale office of CHM Warnick, a company that provides hotel management and advisory services. Arizona continues to boost its hotel occupancy rates and average daily room rates, he said. For example, in metro Phoenix, with 63,000 hotel rooms, occupancy stands at a near record-high rate of 67.7 percent. But while room rates are on the upswing, averaging nearly $127 a night, they still haven’t surpassed their previous peak, when adjusted for inflation. Roughly 9,000 Valley hotel/motel rooms are projected to come onto the market over the next two to three years, Hayward added. If new lodging supply hits the market during a national economic downturn, it could erode occupancy rates and average prices for rooms, he added. However, few economists currently see a recession on the horizon. The state tourism office contends that visitor spending — besides directly supporting 187,000 jobs in the state — resulted in $6.9 billion in wages and $3.4 billion in tax revenue in 2017. Each of those indicators — the number of jobs, job earnings and tax revenue— are at historical highs for Arizona’s tourism industry. Maricopa County attracts nearly half of all tourist dollars spent in Arizona. As with employers in other industries, many hotels, restaurants and other tourist-driven businesses are having trouble finding enough workers, even after two recent hikes to Arizona’s minimum wage. Staffing shortages and higher payroll costs could threaten profitability in the tourism sector. “I’m hearing from a lot of industry people that it’s a huge issue,” said Johnson. “It’s hard to find workers.” Seeking foreign visitors Mexicans represent the largest pool of international tourists — nearly two-thirds of the total — though visits by Mexicans are down slightly owing to the strong dollar against the peso, cross-border political tensions and other factors. The possibility of boosting the number of international visits from around 13 percent of the total is a big opportunity and goal for the state’s tourism industry, Johnson said, as foreign visitors tend to stay longer and spend more. British Airways and Condor Airlines recently increased the number of flights connecting Europe with Phoenix Sky Harbor International Airport. Still lacking are better air connections to other parts of the globe. Direct flights to China, in particular, would go a long way to attract more visitors from Asia, Johnson said. Meanwhile, Tucson International Airport currently lacks direct nonstop flights to and from the Northeastern U.S., let alone Europe or Asia. Domestically, the state’s marketing focus is targeting consumers in key urban areas including Chicago, Minneapolis, San Francisco, Seattle and, more recently, New York. Key competitors to Arizona for tourism dollars include Nevada, California and other Sun Belt states including Florida.