Changes in the travel industry forecasted



September 1, 2023


azlta8Are we in the midst of a mild recession?

According to Senior Analyst of Smith Travel Research (STR), Hannah Smith, “Yes, we are.” Smith acknowledges that by looking at travel statistics since COVID-19, the industry is experiencing a downturn in the economy. STR delivers data benchmarking, analytics and marketplace insights for the global hospitality industry.

Smith was in town on August 16, as one of the presenters for the Arizona Lodging and Tourism Association (AzLTA)’s Northern Arizona Industry Forecast held at Enchantment Resort. She along with AzLTA veterans Kim Sabow, President & CEO and Nicole La Slavic, VP of Government Affairs, plus Bryson Buckley, Litigator with Ogletree Deakins spoke about the current state of Arizona’s travel and tourism industry. Buckley spoke about Arizona wage laws, EEOC mandates for the hearing impaired, civil rights acts, EEOC workplace discrimination and AI ChatGPT risks.

We are excited to report that the AzLTA Industry Forecast event had record-breaking attendance and provided a wonderful opportunity to network with our peers.

As president and CEO of the Sedona Chamber of Commerce & Tourism Bureau (SCC&TB), my presentation included U.S. travel trends, greater Sedona lodging performance, insights into who is visiting Sedona and what we offer as an organization and as an advocate for tourism.

Tourism in Sedona is a $1B industry. Visitors generate 77% of the city’s sales and bed tax revenues which equals $31M in local tax dollars in FY23. Tourism supports over 10,000 jobs in Sedona and generates over $240M in wages. You can easily see how much of a positive impact tourism has on our city.

However, tourists are becoming more selective with their travel choices, noting the economy, higher prices of accommodations and declining travel budgets. In fact, close to three in 10 travelers (29%) plan to save money by selecting less expensive accommodations or destinations, closely followed by (28%) who plan to engage in cheaper activities. We are feeling the tourism pinch in Sedona, while hotel occupancy rates have been relatively flat for the first six months of 2023, the average daily rate charged by hoteliers is down 10% compared to this time last year. Restauranteurs and retailers are also sharing that their numbers are down.

In evaluating the travel industry per se, Hannah Smith noted that while international travel appears to be flourishing this summer with tourists flocking to Europe, travel within the U.S. is below average in occupancy in comparison to last summer. While most of the lodging industry is seeing numbers decline, Smith is optimistic. She predicts that travel will increase by the latter part of 2024 to above-average numbers.

Smith made comparisons of how the travel industry bounced back slowly but steadily, especially after COVID-19, and remains positive that we will see increases in 2024 and 2025.

Nicole LaSlavic gave an overview of the “Pulse of Politics” at legislation. She indicated that Governor Katie Hobbs is very aware of the short-term rental crisis and cited Sedona as an example. However, LaSlavic says that she doesn’t see any changes in policy until legislation reconvenes in 2024.

AzLTA is the leading statewide public policy organization advocating for Arizona’s hospitality, sports, lodging and tourism industry. The association is focused on advocacy, collaboration and education to generate support and increase awareness of the profound impact the industry has on Arizona’s economic growth and represents statewide hotels and resorts and tourism attractions.

While there are concerning downward performance trends in Sedona’s visitor industry, there is a silver lining. The good news is that we have industry leaders such as the folks at AzLTA who keep us informed of what’s happening statewide and nationwide and lobby for our industry. As a board member of the AzLTA, we are happy to keep you apprised of the good work being done by this excellent group of professionals.

Because of our relationships with those at the AzLTA and other such organizations, we are able to keep our finger on the pulse of the tourism industry as well as the economy. This gives us, at the SCC&TB, insight into what’s happening so that our business leaders and community can be better informed.

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