November 29, 2016 was a significant day for the Arizona Lodging & Tourism Association (AzLTA). Why? Take a seat – or jump out of one – this is good.
On that chilly day in Tempe (by Arizona standards), an industry analysis by Oxford Economics revealed that in 2015, 42.1 million people enjoyed overnight accommodations in our state, resulting in nearly 28 million guest nights, with the hotel industry contributing $12.8 billion to Arizona’s Gross Domestic Product (GDP). If you find those statistics impressive, just wait. Arizona’s current tourism and lodging economic impact is like a 9.5 earthquake, the aftershocks of which are multiple and far reaching.
Shaking things up
The fact that we don’t have natural disasters (like earthquakes) here in Arizona – barring an occasional haboob – coupled by the fact that we have practically perfect weather nine months out of the year – makes us a prime tourism location.
It’s more than our perma-sunshine, Grand Canyon, Sonoran desert and natural beauty, however, which drive the economic engine of lodging and tourism.
“All the events in Arizona have put us at the center of the global stage,” says AzLTA President and CEO Kim Sabow.
Some of the events Sabow refers to: The 2015 Pro bowl, The 2015 Super Bowl, the 2016 College Football Playoff National Championship and college basketball’s Final Four coming in March. And these are simply the headliners.
Additional economic impact is boosted by Cactus League spring training baseball and Arizona’s numerous natural attractions — from the Grand Canyon to Lake Havasu to countless other state parks.
According to the Oxford economic study, Arizona hotels and resorts supported $3.5 billion in local, state and federal taxes in 2015. In and of itself, the revenue is something to behold, but add the fact that lodging and tourism was the only industry in Arizona to positively impact all 15 counties in Arizona – that’s remarkable.
To further emphasize the gratitude Arizonans can impart on the tourism industry, $2.99 billion of 2015 tax revenue equaled an annual tax savings of $1,180 for every Arizona household.
Absorbing the aftershocks (in the best way)
Part of AzLTA’s mission is to uphold the three pillars of advocacy, collaboration and education. Evidence of this isn’t simply in notable revenue – although we can pause to appreciate the magnitude of the millions and billions being invested into our state. Further proof of positive economic impact is exemplified by way of job creation.
“Arizona supports more than 183,000 jobs in hospitality alone,” Sabow explains.
Arizona’s hotel industry supports $7.8 billion of labor income. Visitors spend $11.8 billion at Arizona hotels, local businesses and on transportation. Nationwide, guests spend $500 billion at hotels and local businesses, and the industry supports 8 million U.S. jobs.
With a combined 95,000 guest rooms and more than 1,000 properties statewide, it’s easy to connect the dots. Furthermore, Arizona’s travel and tourism industry is considered one of the most vital “export-oriented” industries in Arizona, according to a Dean Runyan Associates report for the Arizona Office of Tourism.
Visitors fuel our economy and jobs by generating revenue in lodging, food services, recreation, transportation and retail. And they have increased spending – more so over the last two consecutive years – making it the first modest boost in revenue since the recession.
The relationship between travel promotion, job creation, tax revenue, increase in demand and generating spending are what Sabow explains as “a virtual cycle that feeds itself.”
Arizona’s positive economic impact stands out even more when compared with national averages. According to Matt MacLaren, senior vice president of member relations at the American Hotel & Lodging Association (AHLA), annual hospitality sales hover close to $500 billion for hotels and local businesses. In terms of employment, the national hospitality industry yields 8 million jobs in the U.S.
“This data is a powerful illustration of our industry’s contributions to jobs, to the economy and to local communities nationwide,” says MacLaren. “The hotel industry is in the business of people, serving our guests and providing lifelong careers for our employees.”
As the economy improves and the consumer continues to regain resources and confidence, will we see the magnitude of Arizona Lodging and Tourism rise to a 10 on the Richter scale? With $3.5 billion in local, state and federal tax support in a single year – brace yourself for more aftershocks Arizona.