Ted Simons: Tourism is big business in Arizona. Direct travel expenditures generate over $16 billion and made for over $2 billion in federal, state and local tax revenues. That translates to a direct impact on over 157,000 Arizona jobs. Those numbers are from 2009, the latest figures from the Arizona office of tourism. They will be updated at the governor's conference on tourism that starts tomorrow. Here now to talk about this vital Arizona industry is Debbie Johnson, president and CEO of the Arizona hotel and lodging association. Rachel Sacco, executive director of the Scottsdale convention and visitor’s bureau, and Bryan Johnson, managing director of Loews Ventana Canyon Resort in Tucson.
Ted Simons: Good to have you all here, thanks for joining us.
Ted Simons: Let's start with the basics. The state of tourism in Arizona. What do we got?
Debbie Johnson: We have some positive things moving forward in Arizona. We're very excited about it, looking forward to this conference tomorrow that will host about 500 tourism professionals from around the state. We have had obviously a challenging year in tourism and in our state in Arizona. We're going to talk about all the positive things and how we're coming out of all of that. We're excited.
Ted Simons: Positive things but challenges too.
Rachel Sacco: There have been a lot of challenges in our state in general, certainly the tourism industry has reflected that. We're starting to move the needle in the right direction, starting to increase modestly our occupancy, even more modestly our rate. Tourism is such a -- so dependent on the psyches of the nation in terms of how do we feel, are we confident, do we feel secure. We hope as all the economics improve tourism also will continue to improve. We're going in the right direction.
Ted Simons: Over all state of tourism in Arizona?
Bryan Johnson: Good. Moving forward. We're encouraged. We're looking at bookings now for the future. We're up over where we were same time last year. So I agree with Rachel. It's moving. Maybe not as great as we want but it's moving upwards. Pleased to see that.
Ted Simons: As far as the governor's conference tomorrow what needs to happen in order to move as fast and as well as you would like?
Debbie Johnson: I think we need to come together and talk about where everybody is, what things people are seeing. But more importantly how we can continue to work together. That's one thing this industry does. We work together. We know the value of the partnerships that we have created for tourism and most importantly for the 158,000 people employed in this industry. I think that's first and foremost on all our minds as we look to the future of tourism, making sure that those people can keep their jobs and support their families.
Ted Simons: As far as something specific perhaps that you would like to see addressed at the conference, is there a challenge that needs to be addressed now?
Rachel Sacco: I think we need to now address how important tourism is to every aspect of Arizona. Tourism impacts every business. It impacts every single person who lives and works in Arizona. We need to have attention on how we build on this asset. How we leverage it, invest in it so we can continue to reap the benefits.
Ted Simons: Is that message lost, do you think, A, and B, is it lost on folks at the legislature, at other government officials who seem to be cutting budgets and cutting funds right and left?
Bryan Johnson: I think there are so many issues out there that people don't fully understand the value of tourism. I believe people look at the state of Arizona with the field of dreams mentality. That build it, they are going to come. We have the great Grand Canyon, but someone has to tell someone what's here. What they got to come and see. From my standpoint, what really needs to happen is funding. Funding needs to be done because our competitors, the other states, are spending more. There are millions of dollars to be made from tourists. They are out there spending their money trying to attract them to the state. We've got such a great state, such a great message. We have such great hospitality employees that want to take care of them but we're not telling anyone. You need that funding to go out and tell the people why you want to come here.
Rachel Sacco: This is probably one of the most competitive industries that there could possibly be on the planet. Honestly, when you look at the competition, it's global. It's worldwide. The people that we are trying to attract here can go anywhere. That high value visitor can go anywhere and they do. You have to stay in front of them.
Ted Simons: It brings to mind, watching TV here I'm seeing ads for Colorado, the beautiful mountains, California, all the movie stars are skiing, whatever they are doing, Las Vegas, ads for Nevada as a whole. Are those folks seeing ads about Arizona?
Debbie Johnson: Well, they are not seeing ads right now because there's not a funding source that there used to be. There was a suspension of funding by the legislature two years ago that's supposed to be reenacted in 2012. As our state is economically been hit we understand that. We recognize that as an industry, but we also understand that tourism can bring income back into our state. So as you see all those ads from other states, we're not able to do that like we used to do. One other thing that people forget is that some of these other things, Nevada you just mentioned, California, they have the Disneyland, casinos and resorts that do so much incremental marketing as well. We have the Grand Canyon but it doesn't have in decree meeting marketing funds like that. It's our job to market the Grand Canyon. We don't want it to go to Nevada or Utah. It's our job to bring it back to Arizona.
Ted Simons: It sounds like again as we talk a lot on this program about funding for various issues, as you mentioned, how do you expect to compete when all I'm seeing are people skiing in Colorado, surfing in California, and you don't even see the grand canyon in these other states.
Bryan Johnson: You're chasing your tail many times because they are expecting the same results that we have delivered with no funding. Again, the belief of it's just going to happen because we have 325 days of sunshine, so everyone is going to come here to the state. But the primary message in marketing is frequency. That message needs to get out there to our target audience. The only way is with funding. The interesting thing we have tried to put across is our industry generates revenue. For every dollar that we spend, typically we're bringing in seven, eight, or nine dollars. It's actually a revenue source that will help with the taxes. We believe that increased tourism is going to help the state get out of some of the issues they face.
Rachel Sacco: one of the interesting things that I think will happen as a result of the governor's conference is we need to learn how to leverage and partner much better than we do. If there's a void in a funding source, then we as private sector and public sector need to come together and figure out how to make two plus two equal four. How can we be in areas that partners are not in? How do we leverage dollars and get better buys? How do we do that more cohesively together?
Ted Simons: Shouldn't that be happening already?
Rachel Sacco: Absolutely and it is to some accident. You need seed dollars. If your seed dollars are completely gone it's hard to planted field. You can put all your Furrows out there but if you don't have seed dollars you're back to the point where you started. We're to the point where our seed dollars are lacking.
Ted Simons: At about the same time the seed dollars started drying up we had SB 1070. Talk to us about the impact. Has it changed? What did you see at first? What are you seeing now?
Debbie Johnson: The nice thing is we're coming out of it, seeing much fewer cancellations, much fewer comments from guests. There's no doubt in my mind there was a significant impact. It hurt Arizona. It certainly hurt Arizona tourism. The boycotts that were called. For whatever reason they were called, really made an impact on people. As we were part of that national spotlight, that news media, as Rachel mentioned earlier, those perceptions created out there were not really what was taking 14 place in Arizona. They are just what people were hearing. So many calls and emails in our office at that time. That has all gone off. So as people are hearing less about Arizona, people are returning to Arizona. That's the great news. That's what we need to just have the funds out there to get that message out about how wonderful and welcoming Arizona is.
Ted Simons: How much of an impact was SB 1070?
Bryan Johnson: It was huge. Huge to my individual property. It had a dramatic effect on my employees. I had my employees, a lot of them refer to me as Mr. Bryan. Mr. Bryan, what am I going to do? We did everything that we could do. We explained to them what was happening. But we had to cut hours. We had to cut services because we didn't have the business. So it really had a dramatic impact on us. We are coming out of it, I agree. There are still some remnants. We still talk to some meeting planners that will say our board still isn't comfortable going to Arizona. But again, it's starting to go away and we're encouraged.
Ted Simons: Did you hear that in the past? Are you still hearing that?
Rachel Sacco: We have heard that in the past and part of the reason is there's a world of possibility that you can choose from if you have a strike against you, why even put yourself in that position if you're the decision maker to bring a meeting there when you could go so many other places? However what we're hearing now is people are looking at Arizona. They are looking at where I come from, Scottsdale. The incentive business is coming back. As corporations are improving and they are holding meetings again, which is good for everyone, they are coming back to this destination. The destination statewide, valley-wide and in our community has proven to be a value and a great experience.
Ted Simons: There was much talk after SB 1070 especially from folks in the tourism industry about the need for Arizona to rebrand its image. Was that need there, has Arizona rebranded its image? I missed it if it's there.
Rachel Sacco: Arizona is a great product. We just need to tell the story. It's not about rebranding. It's about telling the story of the experience. We don't need to convince anyone of anything except that when you come here it's a great experience, it's a great value and we welcome you.
Ted Simons: Was there a rebranding effort? Seemed like there was a lot of talk about that, but I did not see anything going on.
Debbie Johnson: I don't think there was ever talk about rebranding. I think Arizona has a strong brand. It's just getting the message out about what we do have, reminding people. 16 People as they heard some of the negative that was going on and what they heard through the media he forgot what Arizona really is, we're a diverse, both geographically and through our people that live here, through all the different cultures that we have, but we are welcoming destination. We have so many things to offer. I think people forgot that as they were hearing negative things about Arizona. It's not about rebranding but about reminding people what we are.
Ted Simons: Not rebranding necessarily but a change of image. Altering of image. Is that discussed? Is it necessary? What needs to be done?
Bryan Johnson: It's what Rachel talked about. It's getting out the message of what we do and who we are. It's getting it out there with a frequency to try to counteract all the negativity out there. We only had $250,000 to do that. That doesn't even scratch the surface of what we need to do to get that out to our market. So the more people we tell about who we are, what we are, what we do, the better we're going to be.
Ted Simons: Conversely we have so many news stories coming out of Arizona, a lot of them not the best. Some are okay, some aren't. Recently we have had a lot of wildfires here. Massive wildfires. Question out of the blue here, but how does that impact tourism? Are people afraid to come here? Afraid if they do come all they will see is burned trees?
Bryan Johnson: I can tell you from our property we did not receive one call on it. In fact we threw out a special rate and we're helping the people from Sierra Vista who were threatened and out of their homes. What was most telling about that, we're a pet friendly hotel, so we had some people showing up with five cats, three greyhounds. They were so appreciative that they could stay here and we extended a nice rate. But no business loss that I saw.
Ted Simons: So basically news stories like that don't necessarily impact tourism.
Rachel Sacco: I think that any time you're showing something that is maybe scary, whether it be a natural disaster or man made, it makes you think about, well, maybe I won't travel there. So I don't know it's necessarily such a negative, but I don't think it's a positive. That's for sure.
Ted Simons: Yeah. Okay. We will stop it right there. Thank you so much for joining us. Good discussion.
Debbie Johnson: Thank you.