Tag Archives: revenue

New Construction on Vee Quiva Casino

Casino revenues grow faster than national rate

Indian gaming revenue in Arizona grew by 3 percent in 2012, even though no new facilities came online and the number of games in the state actually declined that year.

The numbers were included in a recent report by Casino City Press, which said revenue at Arizona’s 22 tribal casinos grew by about $50 million, from almost $1.75 billion in 2011 to $1.8 billion in 2012.

That was a faster growth rate than the average for the nation, where tribal casinos saw a 2 percent increase in revenues, rising $500 million to $28.1 billion in 2012. Arizona was sixth among states for overall revenues in tribal casinos and 14th for the rate of growth, the report said.

Calls to the Arizona Indian Gaming Association and to several tribes with gaming facilitates in the state were not returned. But other experts pointed to several possible factors behind the increase.

Bob Ellsworth, an instructor for gaming management at the University of Nevada, Reno, said it could be that “the head count … either that has increased or … how much each player spends – puts at risk – has gone up. Or it’s a combination of both.”

Ellsworth said those changes could have led to the decrease in the number of games: From 2011 to 2012, the number of machines in Arizona tribal casinos fell by 1.4 percent, and the number of table games fell nearly 5 percent.

Rick Medina, assistant director at Arizona Department of Gaming, said the 15 tribes that manage casinos in the state may have cut less-popular games to focus on those where players were risking more money.

“Every square foot of their establishment is … important to them,” Medina said. “Casinos don’t want to have games on the floor that people aren’t playing.”

Ellsworth said the number of people playing one machine or table game will affect revenue, since the number of wins per unit per day tends to drive up the amount of money players bet at that unit.

Casinos are also replacing some machines with “multidenomination machines” that let players change the amount of money they play, Ellsworth said.

“For example, a video poker machine could be played as a 5-cent machine, a quarter machine or a dollar machine,” he said. “The casino can offer multiple-denomination games with less machines on the floor.”

Alan Meister, an economist with Nathan Associates Inc. and author of the Casino City Press report, said casinos might also be able to increase revenue while cutting the number of games by offering more multiplayer than single-player games.

Medina said confidentiality agreements between the state and the casinos prohibit him from releasing details on exact reasons behind the higher revenue.

Whatever the reason, more money for the casinos means more money for the state. Medina said a casino pays the state 1 to 8 percent of its revenue, on a scale based on the facility’s revenue in a given year.

In 2012, tribal casinos contributed $84.9 million toward the state budget, according to the governor’s Office of Strategic Planning and Budgeting.

Medina said the tribes plan to announce next week that this summer they expect to reach $1 billion in contributions to the state budget, stretching back to the approval of tribal casinos in 2003.

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Restaurants serve super-sized economic impact

Think about the celebration that occurred after Arizona was awarded  the 2015 Super Bowl.

Much of that excitement came because of the economic impact the Super Bowl will have on the state. But the restaurant industry in Arizona generates revenue equivalent to hosting two Super Bowls a month.

“Restaurants are critical to Arizona’s visitor industry – and vice versa,” said Debbie Johnson, president and CEO of the Arizona Lodging & Tourism Association. “Arizona attracts more than 37 million visitors annually and dining is the No. 1 activity for those visitors. So the success of the two industries are definitely intertwined.”

Arizona’s restaurant industry, which included 8,885 eating and drinking places of business in 2011, is expected to rake in $10.5 billion in sales this year, according to the National Restaurant Association. Arizona’s restaurants also employ 262,200 people, roughly 10 percent of the state’s workforce. That number is projected to grow 15.9 percent by 2023 to 303,800 – translating into 41,600 new jobs in the industry.

“While the Recession claimed 500 Arizona restaurants, the industry that was born out of the recession was stronger and more resilient,” said Steve Chucri, president and CEO of the Arizona Restaurant Association. “From 2007 on, Arizona’s industry sales have grown from $7.9 billion to $10.1 billion (in 2012) with extremely modest growth in the hungrier years of 2008-2010.”

Chucri said Arizona’s rate of restaurant sales growth, while once the top in the nation at 6.2 percent, is starting to fight its way back, growing at a little more than 3 percent each year, boosting this industry’s sales by an estimated $400 million annually.

“I think the restaurant community has stabilized and I sense an increasing confidence in the community,” said Steven Micheletti, CEO of Z’Tejas Southwestern Grill, which has five locations in Arizona and plans to add two more in the next year. “New restaurants are being built and being opened in interesting parts of the city. There is ongoing collaboration between great entrepreneurs happening, creating some great restaurant experiences. Operators are building restaurants in all types of buildings, creating really fun dining environments.”
A lot of the growth in Arizona’s restaurant industry is coming from entrepreneurs and chefs who are giving consumers different and unique dining experiences.
“Some of the strengths in Arizona’s restaurant industry include population growth, strong tourism, unmatched lifestyle and weather, and access to good produce,” said Russell Owens, president and COO of Fox Restaurant Concepts. “With all of these factors working together, there is more appeal for great chefs to come to Arizona to offer innovative new restaurants and fresh ideas. I think we are seeing more creativity today than over the last 20 years and this will positively shape the industry in Arizona for years to come.”

That influx of great chefs and innovative ideas has become an economic engine for the tourism industry.

“Scottsdale has seen a growth in chef-driven, independent restaurants, which are fueling our culinary scene,” said Rachel Pearson, vice president of community and government affairs for the Scottsdale Convention & Visitors Bureau. “Not only do our resorts boast award-winning chefs and restaurants, but now you can drive to every corner of Scottsdale and find unique culinary experiences from well-known chefs.”

Not only are many of the new restaurants that are popping up utilizing fresh ideas and concepts, they are also beginning to increasingly rely on local produce and products to help serve their customers.

“Arizona visitors are really looking for a unique and distinct dining experience that they can’t get back home,” Johnson said. “So trends that we’re seeing in both hotel/resort restaurants as well as off-site restaurants include utilizing local ingredients and offering menu items and experiences that provide a taste of the local community.”

Micheletti has seen an increasing shift to supporting local farmers and growers, but the “Local First” trend doesn’t stop there.
“There’s also a growing influence of local crafted beers and wines,” he said. “Guests really are reading menus and asking questions about ingredients and sourcing. It’s not just about calories anymore.”

In addition to Arizona-grown ingredients, Chucri said one of the most transcendent trends he sees in the industry is the desire for healthy foods.

“The tendency towards more healthful items for the entire family illustrates that consumers are looking to restaurants for more than an indulgent special occasion meal,” he said. “Restaurants are becoming a part of consumers’ daily lives, an extension of their family. Whether it be a compliment dish for Easter dinner, a post-Little League party, or a got-home-too-late-to-cook family dinner, restaurants have infused themselves into the fabric of families everyday lives … a trend that is certain to stick around.”

Proactive Investing vs. Reactive Investing

Arizona could get revenue boost from ‘fiscal cliff’

Legislative budget analysts say the federal budgetary “fiscal cliff” may have a bright side for the Arizona state treasury, at least in the short term.

The joint Legislative Budget Committee staff says it appears that investors and companies are taking steps to respond to the possibility of higher federal income tax rates in January.

Those steps include locking in capital gains now and paying higher dividends in the last quarter of 2012.

According to the analysts, that could substantially increase personal income in the 2012 tax year and produce higher income tax collections for the state in April.

However, the analysts say a downside would be lower than expected income liability in future years.

shopping

Retail: It’s a New Reality

As municipalities all across Arizona have seen their general funds strongly impacted over the last several years due in part to significant drops in sales tax revenue, the importance of a vibrant/strong retail sector has once again taken on a prominent role.

With Arizona cities in some instances relying on retail sales taxes for up to one-third of their general fund revenue, there is today a quiet, but forceful emphasis – particularly in rural areas – being placed on economic development professionals to make sure their programs help retain and attract new retail businesses to their communities, with the progressive municipalities leading the way.

In addition to the general fund ramifications of retail sales tax collection, another significant new reality of the retail sector has been recognized.  Todd Sergi, co-chair of the AZ/New Mexico Alliance for the International Council of Shopping Centers (ICSC), said the stigma of retail jobs being associated only with unattractive, part-time or low-paying jobs is changing.

“With bankers, pharmacists, medical professionals and other non-traditional retail businesses more commonly becoming a part of the new, redefined mainstream shopping environment, the retail sector is now creating well-paid jobs not traditionally seen before,” Sergi said.

The recession in Arizona provided examples in many instances of what a well-designed, well planned center does, or does not, look like.  Successful retail centers have common themes.  Municipalities have realized what it takes for retailers to have success in their cities, including ample parking, un-obscured visibility and easy access from the surrounding streets and easy-to-see signage.  These elements are routinely found in the more highly occupied centers that fared better through the economic down cycle.
Sergi said, “Everyone realizes that a hard-to-get-to retail center hidden behind large over grown landscaped settings with bad signage and limited parking is a lose-lose.  We don’t need more empty buildings.”

Fortunately, the design and planning barriers for retailers to enter a market have been noted.  Lessons were learned.  Statewide, both elected leaders and municipality staff have seen first-hand examples where dated or onerous policy cost their communities opportunities for new sales tax revenue.  The demand and competition to attract those businesses, in some instances, sent potential new entrants to neighboring communities viewed as more reasonable and forward thinking.

The retail industry has been adapting, as well.

Garrett Newland, vice president of development for Macerich, said we are seeing these adaptations every day with continuing anchor changes and new retail concepts.
“Retail is reinventing itself right before our eyes,” he said.  “What malls look like today is vastly different than what we saw in the ‘80s and ‘90s and it doesn’t matter if it’s a super-regional mall or a corner strip center.”

With empty stores and some poorly designed centers dotting Arizona’s retail landscape, a number of existing centers will have to be retrofitted, or possibly redeveloped, to make them assets to the community that can be counted on to generate needed sales and/or real estate tax revenue.

The evolution of retail e-commerce is also changing the face of retail.

An ICSC report recently indicated that retail e-commerce has grown seven-fold since 2000 and at its current growth rate will double again by 2016.  Legislation that requires e-commerce retailers to capture sales tax dollars for government coffers to some degree may level the playing field for the bricks and mortar retailers.

But even so, to remain competitive the storefront of tomorrow is changing.  Retailers now understand the need to integrate their physical and on-line presence, how to balance the product search, selection, transaction and delivery processes desired by today’s consumer and the ability to offer a variety of delivery and return options.

Michael P. Niemira, vice president, chief economist and director of research for ICSC, said the partnerships being established between the private and public sectors, the ability of retail to adapt and meet the needs of today’s customers and the willingness of economic developers to embrace retail bode well for the future economic success of each of our communities.
Eric Larson is president-elect of the Arizona Association for Economic Development (AAED) and board chair for the Scottsdale area Chamber of Commerce. AAED and ICSC will co-present a retail symposium Jan. 8 in which these topics will be discussed in detail by those quoted and others, as well as presentations made by representatives of new/expanding Arizona retailers.  For information, call (602) 240-2233 or visit www.aaed.com.

pennies

Arizona’s state revenue up 2.6% in October

Revenue for state government is up amid what legislative budget analysts call a sluggish, slow-growth economy.

October’s revenue increased by 2.6 percent over the same month a year earlier, with the increase largely propelled by 5 percent growth of individual income taxes.

Sales tax collections rose by just under 1 percent in October. Collections from retail sales were up but collections on contracting were down for the second straight month.

Revenue figures were reported by the staff of the Joint Legislative Budget Committee.