Arizona's immigration law has little impact on Arizona's tourism

Despite the threat of widespread travel boycotts tied to the state's strict new immigration law, early results for hotels and resorts in metropolitan Phoenix show little evidence of any short-term impact.
Hotel occupancy was up 6.5 percent in May and 10.6 percent in June from a year earlier, outpacing national gains, according to Smith Travel Research. Average room rates were flat on an above-average increase in rooms. Revenue per available room, the most closely watched measure, rose 6.2 percent and 11 percent in May and June, respectively.
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There is not enough July data out yet to get a good read, though occupancy and room rates fell in the first two full weeks of the month.
The gains through June give a depressed industry a little something to celebrate, but hoteliers and industry analysts caution that they don't tell the full story of the state of the industry or the immigration-law fallout.
First, the Valley was one of the hardest-hit hotel markets in the country during the recession, and this year's gains are off ultra-low numbers in 2009.
The improvement mainly marks a badly needed rebound, said Jan Freitag of Smith Travel Research.
The big unknown, he and others said: Would the gains be stronger without the immigration law, which was passed in late April and goes into effect Thursday?
"We don't know how much more it could have been," said Robert Hayward, chairman of the Valley Hotel & Resort Association and a principal with Phoenix hospitality consulting firm Warnick & Co.
Most significantly, Hayward and others say, the true tourism impact of the immigration law likely won't show up in hotel-industry statistics until next year and beyond.
That's because the biggest fallout has been from large associations canceling conventions or taking Arizona off their list of meeting sites in protest. Many associations have broad membership bases and emphasize diversity.
Such meetings are generally booked at least two years in advance and can't be canceled at the last minute without large penalties and the logistical nightmare of relocating.
Most of the groups had no choice but to come this summer and fall because the last-minute cancellation fees "would have probably put a lot of these associations in a very difficult situation," said Leo Percopo, general manager of the Sheraton Phoenix Downtown Hotel.
One national group, the League of Resident Theaters, singled out hefty fees as the reason it wasn't canceling a small May meeting at a Marriott resort in Tucson.
But in a letter to Gov. Jan Brewer, the group said it encouraged members to cancel plans to explore Tucson before or after the meeting and instead visit a neighboring state.
The 1,000-room Sheraton, opened two years ago by the city of Phoenix to attract large conventions, has seen just two groups cancel meetings booked for this year, with an estimated loss of nearly $1.6 million in revenue.
The Alpha Phi Alpha Fraternity moved its 5,000-attendee July convention to Bally's hotel in Las Vegas, and the National Minority Suppliers Development Council shifted its planned 7,000-attendee convention in October to Miami.
That is small change compared with the loss of business for future years that was tentatively booked and canceled after the law passed, Percopo said.
For 2011, the Sheraton's lost business currently stands at just under $2.5 million, he said. From 2012-14, the total is between $4 million and $5 million. All had been on the verge of signing contracts.
"You're not going to start to see the impact, in my opinion, until the mid- to late first quarter of 2011," Percopo said.
He and other hoteliers are most worried about the lost business they can't quantify: groups that are striking Arizona off their list of meetings destinations in protest.
"The issue is that we're creating this hole in the future," said David Krietor, a deputy Phoenix city manager who oversees convention center issues.
The Sheraton and other large hotels should be booking big groups today for conventions to be held in 2013 and beyond and say the sales leads just aren't at the levels where they should be in a recovering economy.
Percopo, who has taken three trips to Washington, D.C., in the past 90 days to salvage association business and woo new groups, said the Sheraton's leads are currently flat with last year. "If last year was strong I'd be OK with that, except that last year was not," he said.
Hayward said some meeting planners and vacationers have likely been waiting to see if the law survives legal challenges and goes into effect Thursday as scheduled.
He worries about a new wave of cancellations and protests from those opposed to the law because "now it's for real."Read more: http://www.azcentral.com/arizonarepublic/business/articles/2010/07/28/20100728arizona-immigration-law-tourism.html#ixzz0vZd2udij