Balancing the business economy during an economic downturn



November 18, 2022


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Thanksgiving is coming, and we have much to be thankful for. I hope you will be spending the holiday with family and taking some time just to relax — or perhaps enjoying the hustle and bustle of shopping local for the holidays.

Last week, during a Sedona City Council meeting, we discussed the FY23 Destination Management Plan that the city approved last summer.

I reported on the Sedona Chamber of Commerce and Tourism Bureau’s progress on many fronts, such as: Broadcasting visitor education videos in 85% of our hotels; success in promoting Sedona’s shuttle system; the extraordinary impact of our Sedona Sedona Trail Keepers program, which helped maintain more than 275 trail miles in the 2022 season.

However, I want to share what we and our partners reiterated to the Council about Sedona’s business concerns and the economic impact of tourism management policy.

Wilde Resort and Spa General Manager Jay Kriske said occupancy at his business is down dramatically. “Some of our problems are with storytelling and marketing,” he stated, alluding to the marketing pause in recent years. “We’ve driven consumers out of the market.”

In Sedona, many hoteliers, as well as other businesses, have experienced an increase in expenditures to cover the higher costs of goods, services and labor.

Nena Barlow of Barlow Adventures reported Jeep rentals are down 43% this year compared to last. She said the decline, “is not about competition, it is about the quality of the visitor. When only 33% are overnighters, Sedona is not attracting visitors who will rent our Jeeps.”

Nena’s observation about the quality of visitors is a good one. With a lengthy marketing pause in place, we are unable to solicit visitors who respect our vision. What we are seeing are mainly short-term day trippers with little or no regard for Sedona.

Unfortunately, it is our visitors who are defining who we are to the world rather than allowing those of us who live and work here to communicate that message.

We spent time investigating additional tourist destinations that are similar to Sedona. Our research indicates that our competitors are benefitting greatly and are averaging 2.6% growth in hotel occupancy since FY22, while Sedona’s occupancy is down 9% in the same period. “Sedona has 90,000 available hotel rooms per month, so a 10% decline is 9,000 rooms,” Kriske said. “That translates to about 15-16,000 fewer people here overnight.” The effect spreads beyond hoteliers, he added. “The owner of the laundromat up the street asked, ‘When is tourism coming back?’ Tourism drives their business.”

Several of Sedona’s art galleries mentioned that October was their worst month since 2009, with sales declining 60-70% and foot traffic off by double digits compared to 2019 and 2020. Steve Segner, president of the Sedona Lodging Council calls this a ‘trickle down’ impact from lower hotel occupancy.

Many local businesses agree with these assessments. A recent Chamber survey produced a surprising 124 responses in just 48 hours, with 83% saying less tourist traffic negatively affects their bottom line, and 44% indicating a lack of destination marketing is hurting them.

Restaurants are feeling it too, according to Kriske, who told Council that our local eateries, which were once overcrowded last year, now lacks customers.

There is much more to the discussion, and solutions will emerge as the many players such as the business community, the Chamber as the destination manager, residents, and a changing Council, study our options. Sustaining a healthy tourism economy is complex and delicate with vast implications for the livelihood of thousands of Sedonans.

When we meet with Council in January, we will present concepts that will draw visitors here who care about Sedona and will support our local businesses and environmental initiatives.

Next week, I will take a closer look at how our current visitor may be shaping Sedona’s image through social media channels, and what we can do to rewrite that narrative while steering a progressive economy towards our business community.

Michelle Conway, President/CEO
Sedona Chamber of Commerce & Tourism Bureau