The Pandemic’s Economic Shock Waves



July 10, 2020

Beautiful Sunset Scenery of Sedona, Arizona

Arizona and Sedona continue to deal with the spread of COVID-19 and the pandemic’s economic shock waves. In response, the City of Sedona and the Chamber have set a course for economic recovery in FY21 that emphasizes community safety and rapid response.

A few stipulations: first, the threat of COVID-19 is the critical variable in our economic outlook, and it remains unpredictable.  Second, travel accounts for 10,000 Sedona jobs and virtually all of our economic activity. Though Sedona is committed to economic diversification, tourism’s dominance will not change anytime soon.

How Sedona manages the broad outlines of this billion-dollar industry with millions of travelers is the subject of intense public discussion. Misperceptions recur, so let’s restate a few facts:

The City of Sedona and the Chamber manage tourism together

The Chamber and City Council jointly produce an annual destination management plan. The Council approves strategy, funding and provides oversight. The Chamber manages the Visitor Center, marketing, communications and sales in alignment with the adopted strategy.

In recent years, Council’s direction is to hold visitation steady, increase length of stay and visitor spending, and implement sustainability initiatives.

The Chamber presents a draft plan each spring. The Council reviews and revises the program and allocates the funds it considers appropriate.

The Chamber provides quarterly written progress reports throughout the year and in January, the Council holds a public work session with the Chamber Board of Directors to ask questions and discuss the following year’s strategy. The Chamber also conducts an annual audit which is posted online and provided to the City Council.

Sedona Taxpayers do not fund the City/Chamber tourism partnership

The funds allotted by the Council for the approved annual plan are a portion of the bed tax charged by Sedona hotels to their guests.

Of course, few Sedonans stay at Sedona hotels, so virtually the entire bed tax is paid by visitors. The City and hoteliers negotiated the bed tax – which is in addition to the sales tax hotel visitors pay – with the understanding that a portion of it goes to manage tourism.

The Council does not allot 100 percent of the bed tax to the Chamber for our management responsibilities. Instead, the Council decides each year how much is needed to implement the approved plan.

The FY21 plan emphasizes safety first and adaptability to COVID-19

The Council and Chamber plan for the fiscal year starting this month places safety first by emphasizing a rapid response to the changing COVID-19 situation.

Already, the Chamber has paused all advertising due to the recent increase in Arizona cases, and the Mayor proclaimed a mandatory facemask policy. We closed our Visitor Center and switched to virtual services when an employee tested positive after an out of town trip. Clearly, we can move quickly.

Economically, we aim for a middle ground: visitation below pre-coronavirus levels but increased visitor spending to help businesses and employment recover. Our average hotel occupancy target for FY21 is 55 percent, 20% lower than last year’s average but somewhat higher than the predicted national average.

Throughout the year, the Chamber will advise Council on implementation and follow Council directives. We are all aware of the pressing economic need as well as the imperfect state of humanity’s knowledge of coronavirus. Many challenges await.

However, amidst the uncertainty, Sedona can count on the careful, responsible and flexible joint management of our destination recovery plan for FY21.

–Jennifer Wesselhoff, President/CEO