Scottsdale hotels, tourism rebound

Occupancy, revenue per room in March bested other top markets

by Peter Corbett - May. 16, 2011 12:00 AM
The Arizona Republic

Scottsdale's tourism industry continued to rebound this winter from the recession slump and posted the nation's strongest hotel-performance figures in March compared with the top-25 hotel markets.

Scottsdale-area hoteliers filled 86.9 percent of their rooms in March, according to Smith Travel Research, and reported revenue per available room of $166.05, a key industry metric.

That topped Miami in occupancy by just over 1 percentage point and per-room revenue was more than $4 higher than New York, typically the nation's priciest hotel market.

"We had a great March," said Robb McCreary, hotel director for the year-old Talking Stick Resort. "Nobody should be complaining in this town."

Tourism is vital to Scottsdale, a city that sees 8 million annual visitors who pump about $3.6 billion into the economy.

Talking Stick Resort and other hotels got a boost in the first quarter from a record season of spring-training attendance, the college-football championship game, as well as car and horse shows that lure visitors.

During spring training, Scottsdale hosted the world champion San Francisco Giants, while the Arizona Diamondbacks and the Colorado Rockies played their first seasons in Salt River Fields at Talking Stick, the new two-team complex on the Salt River Reservation east of Scottsdale.

Those three teams attracted a combined attendance of about 520,000, nearly one-third of the Cactus League's total 1.59 million attendees this year. Usually, close to half of the fans are from out of town, previous surveys say.

In January, college-football fans helped fill 78 percent of Scottsdale-area hotel rooms over the five days surrounding the BCS National Championship Game and paid an average room rate of $193.

"People are gaining a little bit of confidence and taking trips again," said Mike Surguine, Scottsdale Convention and Visitors Bureau chairman.

Scottsdale's tourism industry peaked in 2007 before it "fell of a cliff" two years ago when the recession hit, he said.

First-quarter figures from Smith Travel show occupancy up 1.9 percent from a year earlier, average room rates up 5.2 percent and per-room revenue growth of 7.2 percent.

Preliminary figures for April show small gains as well, Surguine said.

Scottsdale also seems to be getting past the backlash from last year's Senate Bill 1070, the controversial state immigration law.

Arizona's immigration law makes it a state crime to be in the country illegally. A federal judge's order blocked parts of the law from taking effect, including a requirement that police enforcing other laws question people about their immigration status if they have reason to suspect those people are in the country illegally.

Last week Gov. Jan Brewer announced plans to appeal that ruling to the U.S. Supreme Court.

When the law was passed last year, it prompted some organizations to cancel events planned in the Valley or to boycott the state.

"We didn't hear much about that from leisure travelers or meeting planners," said Brent DeRaad, visitors-bureau executive vice president. "It doesn't seem to be the factor it was a year ago."

The so-called AIG effect that hurt luxury resorts is fading away as well, industry officials say.

The government-rescued insurance giant was ridiculed for spending nearly $500,000 on meetings at a top-of-the-line Southern California resort a week after receiving a government bailout. So-called incentive trips, where top performers are treated to a luxury vacation, are a key market for Phoenix-area resorts. In the wake of the scandal, companies shied away from expensive getaways.

"Groups are starting to spend a little more," said Jim Lammy, Southwest Conference Planners president.

Corporate groups are generally smaller now with 200 to 300 attendees rather than 400 to 500, he said.

Lammy, a corporate-meeting planner in Scottsdale for 24 years, said his business was off 65 percent two years ago, rebounded strongly last year and revenue is about average this year.

The slow summer-travel season in Scottsdale could see some pickup in occupancy, DeRaad said.

Higher gas prices might cut drive-in visitation from regional markets but that could be offset by locals taking advantage of summer resort bargains, he said.

www.azcentral.com