Valley's economy looks to sports, car events

The Kansas Jayhawks trampled the University of Minnesota Golden Gophers on Wednesday in front of a mostly out-of-town crowd at the Insight Bowl in Tempe's Sun Devil Stadium.

Retailers look to Fiesta Bowl fans for big sales

The Ohio State Buckeyes and the Texas Longhorns plan to battle it out Monday in the Fiesta Bowl at University of Phoenix Stadium in Glendale, but their fans from around the country have been partying in Scottsdale and Tempe for days.

If the out-of-towners here for the bowl games are a bellwether, it should be an OK high season for East Valley hotels, shops and restaurants. From January through April, local hotels and resorts charge the highest rates and still fill up with travelers escaping cold weather elsewhere. That's in a normal year.

But businesses that are busy now shouldn't count the next few months' worth of tourists before they arrive.

The economy is in the tank, and the start of a recovery is at least a year away, many experts say.

Several local hotels report having slow bookings for January despite starting the year with a few days worth of visiting football fans.

In fact, sporting events like the bowl games tend to be less affected by economic downturns than other activities, said Ray Artigue, executive director of the W.P. Carey School of Business' MBA Sports Business Program at Arizona State University.

"Sports tourism used to boast of being recession-proof," Artigue said. "That's not necessarily so. All sectors of the sports industry are realizing otherwise. But sports are part of everyday life, a diversion from the serious part of life. People look forward to (sporting events) and they do hold up better than most industries in a weakened economy.

"Thank goodness for both of these bowl games, but we can't look at them as indicative of more traditional tourism."

TRADITIONAL TRAVEL

According to travel research expert Peter Yesawich, president of Ypartnership, 71 percent of Americans who call themselves active travelers plan to travel in 2009, but they'll do it differently.

Ypartnership identified new travel trends spawned by the sinking economy and sagging budgets. Yesawich said travelers will opt for good deals, comparison shop more through the Internet and shorten both vacation and business trips.

A recent survey by travel insurance provider World Nomads and travel content provider GeckoGo found 68 percent of Americans were concerned about the cost of travel, 22 percent have canceled planned trips, and 44 percent said they will still travel but spend less money.

Valley hoteliers are already feeling the pinch.

At the Chaparral Suites Resort in Scottsdale, reservations for January and February are off the usual pace, said general manager Tom Silverman.

"The last five months have been the slowest I ever remember," said Silverman, whose family has been welcoming guests for more than 60 years. "I believe 2009 will not be good, but we'll get through it."

Chris Kenney, marketing director for the Tempe Mission Palms, said the hotel was packed with Insight Bowl fans and has lots of reservations from runners participating in P.F. Chang's Rock 'n' Roll Marathon midmonth.

"We are actually up a little from last year for January, but we'll see how the rest of the season does," Kenney said. "We can feel some of the slowdown, and we are very appreciative of the business we have."

The last items likely to be scratched from travel budgets are what Yesawich dubs "celebration vacations," which commemorate important events. The bowl games fit thatcategory.

But will the desire to escape the cold and snowy climes to play golf in Scottsdale be celebratory enough to loosen purse strings? How important will the Valley's usual winter visitors consider the opportunity to get a glimpse of the pre-season Chicago Cubs, a vintage Shelby Cobra or ostriches running through a Chandler park? Is it worth a cross-country trip to test hoop skills at the NBA All-Star Jam Session or watch NASCAR greats rev up at Phoenix International Raceway.

"I think everyone is hoping high season will kick in after (the bowl games) in January," said Rachel Sacco, president of the Scottsdale Convention & Visitors Bureau. "We have a tremendous line-up. (P.F. Chang's) Rock 'n' Roll Marathon registration is moving forward. We have the auto auctions, horse shows. We have a lot going on in season."

EVENTS ARE KEY

The plethora of events, many of them stacked up back-to-back January though April, are key attractions for visitors, distinguishing the Valley from other warm winter destinations, Sacco said.

The Barrett-Jackson Collector Car Auction, which has evolved into a major lifestyle event attracting thousands of well-heeled visitors from around the world to eye and buy pricey vehicles, is among the most lucrative for Scottsdale resorts and restaurants.

The city estimates visitors spend at as much as $100 million while they are in the Valley for the mid-January auto extravaganza, which has spawned a handful of additional car auctions, attracting more collectors to spend even more time and money in Arizona.

Based on an unexpected turnout for a new Las Vegas event in October, Barrett-Jackson president Craig Jackson said he's expecting even more high-rollers than usual to show up in Scotts-dale.

"We're getting several million dollars worth of new bidders. In Las Vegas we doubled our gate predictions, and I think a lot of people who got a taste in Las Vegas will come (to Scottsdale)," Jackson said.

But if Barrett-Jackson is the single biggest event for tourism spending, major league baseball's month's worth of spring training games is the economic engine that could make or break the new tourism season.

And like the bowl games, the Cactus League spawns "celebration" type vacations for the fans who return every year for a few days or a few weeks to watch their team in close-up comfort, said Robert Brinton, president of the Mesa Convention & Visitors Bureau and president of the Cactus League.

A record 1.3 million people attended Cactus League games last year, 55 percent of them from out-of-state, and the economic impact of the out-of-state spenders was an impressive $313 million, according to a study by ASU's MBA Sports Business Program.

RECORD CROWDS

Brinton is anticipating new record attendance for Cactus League games in 2009 and an economic impact topping $400 million.

That's based on two teams new to the Cactus League - the Los Angeles Dodgers and the Cleveland Indians - the Chicago White Sox move from Tucson to the Valley, and warm-up games with World Baseball Classic teams. Together they add a week and 73 more games to the schedule compared with the 2008 line-up, Brinton said.

That could salvage an otherwise dismal tourism season, he said.

"In the downturn, we'll probably see that Cactus League is even more valuable than before," he said.

Artigue agreed.

"Cactus League, the FBR Open (golf tournament), the NBA All Star game - those events fare even better because they are not in plentiful supply," he said.

But with more than half the typical Valley winter tourist trade coming for business meetings, event-based leisure visitors have a lot to make up for if the corporate crowd severely curtails travel budgets.

Bed taxes, surcharges paid by hotel guests, are down double digits, according to several East Valley city financial statistics.

It's a downturn much deeper and pegged to last much longer than the cutbacks after the attacks of Sept. 11, 2001, Brinton said.

Still, it's a cycle, he said, and when the economy comes back he believes the Valley will bounce back faster and higher than the rest of the country.