The facts and figures flew—some up, some down, a few sideways—but in general, the trend was overwhelmingly upward as Tucson got an excellent report card at a recent Southern Arizona Tourism Industry Forecast event.
“We’re coming off three fantastic years in a row and are hopeful the 2019 lodging performance predictions will be equally strong,” Visit Tucson President and CEO Brent DeRaad told Inside Tucson Business at the Aug. 27 event. “And while I haven’t yet seen those actual numbers, it’s my understanding that we’re on target for another great year.”
DeRaad noted that overall industry revenue had increased 10 percent per year over the last three years.
“While we don’t know if that’s sustainable, we do think a strong growth trend remains in our future,” DeRaad said. “As we look at Tucson compared with some of the other cities in the West, we see we’ve still got plenty of room to grow even more.”
Citing figures from July 2017 thru June 2018, DeRadd said: “We’ve exceeded our previous performance in several categories, double-digit increases that we’re proud to talk about.”
As many larger cities start to plateau, local numbers are remarkable, including a three-year 30 percent growth in occupancy rates.
“We’re like a large company in town that generates $171 million in visitor spending over a year and that translates to the creation of $13 million in new state tax revenue,” DeRadd said.
Also at the podium was Kim Sabow, president and CEO of the Arizona Lodging and Tourism Association, who reinforced the positive numbers.
The association’s web page reported current totals of 43.9 million overnight visitors annually throughout the state, involving a hospitality industry workforce of more than 300,000 to make it function smoothly while bringing in $22.7 billion in direct visitor spending annually. According to Sabow, it’s a team effort—a small, but mighty partnership team.
“Economic development in travel and tourism is vital in sustaining our economy and we can all celebrate that new record number of visitors to Arizona,” she said.
Keynote speaker was Chris Klaudia, senior director for Market Insights at STR, one of the world’s leading providers of data involving the hotel industry.
Klaudia said Tucson’s story “is an awesome one” and the immediate future outlook “is predicted to exceed the U.S. hotel/tourism industry as a whole as well as other areas throughout the state.”
What the local numbers portend adds up to a great forecast for the immediate future, she said, citing figures that showed the Arizona hotel room occupancy rate up 2.5 percent, with the Phoenix rate pegged at 2.6 percent and Tucson’s occupancy rate a glowing 5.3 percent.
Klaudia said that while the last 12 months showed a decline in the supply side with some properties closed for renovation, there was a strong demand that lead to the rise in occupancy rates—5.3 percent versus a national rate of increase of only 1 percent. And the Average Daily Rate of $110 was up 4 percent, against a national rate increase of 2.4 percent.
“The Tucson market is doing really well,” she said.
All of which is indicative of the fact that the recession is in the rearview mirror, according to DeRaad.
“A lot of folks believe that Southern Arizona, and Tucson in particular, is one of last areas in the nation to come out of the recession—and some would argue that it still hasn’t emerged completely—but at least on the lodging side, we’ve had three great years with more expected,” DeRadd said. “Phoenix and Scottsdale continue to have high occupancies and high hotel rates and that allows us to slot in because nearly half of our business comes from meetings and we’re getting more of those groups coming to Tucson.”
Visit Tucson used the forum to announce details of a 10-year master plan for destination marketing organizations. According to DeRadd, they’re just in the beginning of the emergence of a voluntary compliance program that would add a 2 percent surcharge on a guest checkout bill, the dollars of which would be allocated by “an industry governance committee to augment a tourism sales, marketing, and promotion program.”
Noting that there are 160 similar improvement districts throughout the country, most of them in California where they have tripled the amount of tourism promotion dollars available, DeRadd said seven local properties had already signed up to participate.
“We need to get closer to 25 or 30 and hopefully will do so by spring 2019 so we can implement the program to further promote the fact that Tucson is a UNESCO City of Gastronomy and to campaign for more flights from the Eastern U.S. coming into the Tucson marketplace,” he said.
Having just finished year one of a three-year strategic plan in which 130 of 200 year one tasks were completed with infrastructure improvements noted, DeRadd estimated that Visit Tucson represented a $22 million impact working to drive economic development by connecting visitors with meeting and travel experiences in the Old Pueblo. He told the assembled industry audience: “We’re only as good as the product we have to sell—and what you provide us is fantastic.”