Year End Report to City Council
AS SEEN IN THE RED ROCK NEWS
September 25, 2020
The Chamber, in our capacity as Sedona’s tourism managers, filed our Year-End Report with the City Council in August, returning $141,605 in unspent FY20 Tourism and Visitor Services funds to the City of Sedona. Those dollars are now in the hands of City leaders who can use them to support our economy – advancing capital projects, helping local businesses and non-profits, or restoring frozen programs or positions.
The net balance in the Tourism and Visitor Services budget is due to various pandemic impacts in FY20, which ended June 30, resulting in $141,605 in returned funds.
A refresher: the Chamber of Commerce & Tourism Bureau manages tourism as a certified Destination Management Organization in a partnership with the City of Sedona. Our Tourism and Visitor Services budget is funded by a City bed tax paid by visitors staying in hotels and other lodging facilities in Sedona. Each year, in discussions with the Chamber, the Council allocates a certain amount of the bed tax as a tourism-management budget. The Chamber proposes a budget that advances the Four Pillars of the Sedona Sustainable Tourism Plan – the Environment, Quality of the Economy, Local Quality of Life and the Visitor Experience.
Our Year-End Report also features data on tax collections, hotel occupancy and daily rates for FY20. FY20 sales tax collections were about six percent below the City of Sedona FY20 budget. Considering the steep plunge in business activity in March, April and May – when sales tax revenues were 37, 58 and 28 percent below budget, respectively – the overall impact is less grim than many anticipated. Careful City budget forecasting and relatively steady retail recovery prevented a double-digit hit to sales tax revenues, a significant source of funds for essential services.
Hotels suffered catastrophic declines this spring as measured by tax collections and occupancy rates. Sales tax collections were 37 percent below city budget forecasts in March and 58 percent below projections in April.
Occupancy rates also cratered; for three weeks in April, occupancy was down an incredible 89 percent from the same period in 2019 before beginning a slow recovery, with some ups and downs.
Bed tax collections were commensurately brutal, 57 percent below budget in March and 91 percent below projections in April. They showed a May ‘improvement,’ down 52 percent, before coming in 12 percent below expectations in June. For the year, bed tax collections were down 13 percent; actual collections totaled $4,160,184 versus a budget estimate of $4,769,300.
Interestingly, in June, hotel room rates were 6 percent higher than the rates in June 2019 and have risen steadily since. This may indicate Sedona, like other semi-rural destinations with an outdoor focus, will be a premium destination for higher-income travelers as a cautious recovery continues. We will talk more about that next week as we review the summer numbers and look at what lies ahead for Sedona’s economic recovery.
The Chamber’s regular reports to Council are public record and highly informative. You can find them at SedonaChamber.com.
–Jennifer Wesselhoff, President/CEO