Scottsdale attracts approximately 9.1 million U.S. visitors to Scottsdale, with 51% staying overnight.
Scottsdale’s 1.7 million international tourists primarily come from Canada, Mexico, the United Kingdom, Germany and France. Visitors coming from a further distance tend to spend more and stay longer.
Visitors come to Scottsdale to experience fantastic year-round weather in a stunning Sonoran Desert setting, along with world-class amenities, including resorts, spas, golf, arts and culture, outdoor adventure, shopping, dining, and nightlife.
For both leisure and meetings business travelers, Scottsdale usually competes with other warm-weather destinations such as Austin and San Antonio, Texas; Palm Springs and San Diego, Calif.; Las Vegas, Nev.; Orlando and Miami, Fla.; Nashville, Tenn.; and Phoenix and Tucson, Ariz.
According to the city of Scottsdale, Scottsdale hosted an estimated 10.8 million visitors in 2018 (the most recent year in which statistics are available) accounting for an economic impact of $3.1 billion.
Privilege-tax collections attributable to visitors are around $57.7 million, which accounts for about 26% of the city’s total sales- and bed-tax collections. Nearly $22 million of the total $57.7 million are collected as bed taxes, while $35.7 million are sales-tax collections.
All sales-tax revenue paid by visitors goes to the city’s general fund to pay for police, fire, streets, water, land preservation and other city services. No sales-tax revenue is used to promote tourism in Scottsdale.
Sales-tax revenue paid by tourists helps reduce taxes and alleviates a portion of the burden that would otherwise fall on residents and businesses to pay for city services.
The industry directly supports 27,822 jobs within the community.
Cities throughout the United States charge local transient lodging taxes, more commonly known as bed taxes, through their hotels and resorts. Cities use bed-tax revenue in different ways to meet community needs, but most invest at least a portion of their bed-tax collections into marketing their cities to leisure travelers and meeting planners.
Scottsdale’s bed-tax rate is 5% of the total 14.02% checkout rate that guests are charged at Scottsdale hotels and resorts.
Hotels and resorts operating within Scottsdale are required to collect bed-tax revenue from customers and provide it to the city of Scottsdale. The bed-tax revenue is distributed to various programs and contracts based on the voter-approved Proposition 200 and a financial policy established by the Scottsdale City Council. Of the total bed-tax revenue collected, 50% goes directly to the city of Scottsdale, which is in addition to all sales-tax collections. The remaining 50% is allocated to destination promotion via a contract with Experience Scottsdale.
From the city’s portion of bed-tax revenue, the city’s general fund receives 12% to support city services; 9% for tourism-related event support and development; 4% for administration and tourism research; and 25% for tourism-related capital projects.
Scottsdale’s bed tax is a consumption tax paid only by those who stay in our hotels and resorts. Unless residents stay in Scottsdale hotels or resorts, they do not pay bed tax.
No other taxes are used to support tourism promotion.
Scottsdale’s hotels and resorts advanced the initial proposal to create a bed tax in 1977. In the intervening years, the industry has supported increases in the bed-tax rate to ensure that the city had the necessary funding to promote the destination and to invest in projects within the community. No other industry in Scottsdale has embraced such a model. The industry essentially taxes itself to not only support its needs without seeking general fund support, but also generates millions of dollars for the general fund. It truly is one of Scottsdale’s best investments.
According to Destinations International, “Every community must compete with every other community for their share of the world’s attention, customers and investment. To compete, people need to be aware of a community, have a positive impression, and want to visit to experience the community and meet its people. This is achieved through clearly developing, articulating and managing the community’s brand. Proactive efforts must be made to promote, market, sell and engage potential visitors. And all of this must be reinforced again and again. Destination marketing organizations are uniquely positioned to do this. It is an essential investment to develop opportunities and build quality of life to benefit all the residents of a community.”
Industry leaders and executives have heard over the years, “It’s not your money.” While bed-tax revenue belongs to the city of Scottsdale and its residents, the revenue collected is only available because the hotels and resorts agreed to increasingly tax their customers. Although this additional tax creates a competitive disadvantage, the hotels understand the importance of reinvesting dollars back into the community – with the hope and expectation that a portion of the revenue will be funneled back into the industry. Since the industry agreed to this tax, hoteliers want to ensure the return on investment is strong.
In March 2010, Scottsdale voters passed Prop 200 in a 56% to 44% margin. Prop 200 went into effect July 1, 2010. Prop 200 raised the bed-tax rate from 3% to 5%. Prop 200 also specified how those funds could be allocated.
Prop 200 is doing exactly as was intended. The passage of Prop 200 has provided Scottsdale with more bed-tax collections, provided Experience Scottsdale with a more consistent revenue source to drive demand, and provided the city with more dollars to invest in community capital projects that improve the visitor experience and the quality of life for residents. In fact, without Prop 200, the community would not have had the funds to invest in such large capital projects like WestWorld, Western Spirit: Scottsdale’s Museum of the West or Scottsdale Stadium; events like Canal Convergence; or additional investments like Old Town promotions and activations.
Scottsdale is known throughout the world as a desirable place to visit and hold a meeting. Scottsdale has developed a cachet because of its climate, Sonoran Desert setting, airline service, resorts, golf, arts and culture, restaurants, shopping, nightlife and more, all of which provide an incredible experience for visitors. However, Scottsdale faces strong competition from other destinations, and the community needs to continue adding and improving attractions and amenities in order to attract new tourists, while maintaining its appeal to long-time visitors.
Since 2010, bed-tax collections have helped fund tourism-related capital projects, such as the expansion and enclosure of WestWorld of Scottsdale, the building of Western Spirit: Scottsdale’s Museum of the West, and the renovations of TPC Scottsdale and Scottsdale Stadium.
Whether a motivator for travel or an enhancement to the visitor experience, events are a critical component of Scottsdale’s product inventory. Events help drive new and repeat visitation and establish the city as a destination that caters to residents and visitors with wide-ranging interests.
The city of Scottsdale offers several event funding programs, all funded by bed tax, in order to attract new events and support existing ones. Each funding program has different criteria to determine whether to fund an event and for how much. These programs include: Community Event Funding, Event Venue Fee Funding, Matching Event Advertising Funding, New Event Development Funding, and Multi-Year Community Event Funding. Visit https://www.scottsdaleaz.gov/tourism to learn more about these programs.
Events that have received bed-tax funding from the city include: Super Bowl, College Football Championship Game, NCAA Men’s Final Four, Canal Convergence, Barrett-Jackson Auto Auction, Scottsdale Arabian Horse Show, Cactus League Spring Training, Fiesta Bowl, Women’s Half Marathon, Competitor Group Marathon Series, World Food Championship, Bentley Scottsdale Polo Championship, Rugby Bowl, Off-Road Expo, Grand Prix, Parada del Sol Parade and Rodeo, Scottsdale Culinary Festival, PRCA Championship Rodeo, NCHA Cutting Horse Event, Scottsdale International Film Festival, Scottsdale Gallery Association ArtWalk, and more.
Experience Scottsdale (formerly known as the Scottsdale Convention & Visitors Bureau) was created in 1987 as a nonprofit marketing division of the Scottsdale Area Chamber of Commerce. Experience Scottsdale is a destination marketing organization (DMO) that exists for the purpose of promoting the Scottsdale area. Experience Scottsdale became a private, 501(c)6 nonprofit company in 2001.
Experience Scottsdale is the sole organization responsible for promoting the city as a luxury destination for meetings, events and leisure travel. Before a visitor or group decides on a hotel, golf course, spa or restaurant, they first must choose our destination. Experience Scottsdale ensures these visitor and group dollars land in our community.
- Vision: To establish Scottsdale as a year-round, luxury travel destination.
- Mission: To enhance the local community by promoting the Scottsdale area as a luxury destination for meetings, events and leisure travel.
- Key Objectives:
- Generate visitor-related economic impact for the Scottsdale market area
- Foster positive relationships with customers and stakeholders
- Run an effective business
- Enhance the long-term health and development of the destination
According to Destinations International, “Destination organizations are charged with representing a specific destination and helping the long-term development of communities through a travel and tourism strategy. For visitors, destination organizations are like a key to the city. They can serve as a broker or an official point of contact for convention, business and leisure travelers. They assist planners with meeting preparation and encourage business travelers and visitors alike to visit local historic, cultural and recreational sites.”
Also, according to Destinations International, every U.S. state and almost every larger city and county has its own DMO. DMOs come in many different forms, but all are organized to promote their respective destinations to attract visitors and/or to solicit and service meetings and conventions.
Destination marketing organizations are inherently tied to the destinations they serve. As the city’s contracted DMO, Experience Scottsdale is the only company that offers all these combined services – marketing, public relations, convention sales and services, and tourism outreach – within one organization.
Experience Scottsdale is not an advertising or public relations agency. We do not represent multiple companies or brands. Under one entity, we provide cohesive messaging and strategies through all the aforementioned areas – reaching not only leisure visitors, but also meeting and event planners, travel agents and tour operators, and media and influencers around the world. There is no other singular entity that provides all these services.
Most of Scottsdale’s competing cities have budgets that are two to three times larger. Competition continues to become fiercer every year.
While most programs Experience Scottsdale operates require feet on the ground, such as our sales staff, we pride ourselves on ensuring the maximum amount of dollars are going to programs. Therefore, we benchmark our organization against other destination marketing organizations. Any destination that holds tourism as a priority in their community has a destination marketing organization like Experience Scottsdale. The information in the following chart comes from Destinations International, which represents destination marketing organizations around the world. Experience Scottsdale is within a competitive range for our personnel and below on administrative and general expenses. Most importantly, most of Experience Scottsdale’s revenue goes toward programs.
In addition to the contract with the city of Scottsdale, Experience Scottsdale also has a contract with the town of Paradise Valley – a partnership that we’ve held for more than 30 years – to conduct destination marketing efforts on behalf of the community.
In the 2019-20 fiscal year, Experience Scottsdale’s budget is $16.1 million. We merge and leverage our revenue in order to maximize the return on investment for all partners.
EXPERIENCE SCOTTSDALE REVENUE
FY 2019-20 BUDGET
Experience Scottsdale is a membership organization with more than 420 members. As a membership organization, we can easily collect and distribute information that would otherwise be more difficult to obtain. Through the Experience Scottsdale membership program, we also can efficiently match the needs of customers – leisure visitors, media, meeting planners and travel professionals – with the services of local businesses.
Experience Scottsdale prides ourselves on making every dollar count. Through extensive research, we ensure that we are targeting the right customers at the right time with the right message. Experience Scottsdale conducts proprietary research that allows us to analyze visitor transaction records from our premier resorts and hotels. This type of research is incredibly rare as most hotels – and their corporate owners – are unwilling to share this type of data. From this proprietary data, Experience Scottsdale determines exactly where advertising should be placed and what messaging should be used. This research further enables us to target, down to the household level, potential, high-value visitors with a propensity to travel to Scottsdale.
Experience Scottsdale also conducted comprehensive quantitative and qualitative research when developing our current brand and advertising campaigns. To learn more, visit www.ExperienceScottsdale.com/Brand.
In addition, Experience Scottsdale reviews extensive statistics on hotel, golf course and short-term rental performance. We participate in national meetings research to understand our destination’s strengths, weaknesses and opportunities, including comparisons to top competitors. And while international data is more difficult to come by, we receive information to understand some of the international customers coming to Scottsdale, including their spending habits. We also have access to extensive industry research and trend reports that help our staff stay on top of current trends and shifts in the industry. All this research helps inform our decisions.
In addition to working with the local tourism community, Experience Scottsdale is a trusted partner of the Arizona Lodging & Tourism Association, Arizona Office of Tourism and other statewide destination marketing organizations. Furthermore, Experience Scottsdale has long-standing relationships with local and national industry associations, vendors, suppliers and other tourism partners. Experience Scottsdale also works closely with other local stakeholders such as Scottsdale Sister Cities, Scottsdale Charros, Scottsdale Leadership, and many more.
Experience Scottsdale works closely with the city’s tourism and events department as well as other city departments and commissions. We also partner with city entities, such as Scottsdale Airport, WestWorld of Scottsdale, Scottsdale Stadium, Scottsdale Sports Complex and Scottsdale Parks & Recreation. Experience Scottsdale also works closely with other community partners, such as the Scottsdale Arts District, Scottsdale Area Chamber of Commerce, the McDowell Sonoran Conservancy, Scottsdale Arts and many others.
To determine Experience Scottsdale’s impact on the local community, we commission research from market leaders, Longwoods International and Tourism Economics. Experience Scottsdale’s destination promotion has proven effective at inspiring interest in the Scottsdale area, growing tourism and supporting local businesses.
EXPERIENCE SCOTTSDALE ECONOMIC IMPACT5
Travel is the first step in shaping perceptions, and Experience Scottsdale’s destination promotion contributes to a positive overall impression of the area. Consumers who recalled our advertising were not only more likely to visit, but also more likely to view Scottsdale as a good place to live, work, start a business, attend college, purchase a vacation home and retire.
ADVANCING ECONOMIC DEVELOPMENT5
Experience Scottsdale has partnered with the city of Scottsdale as its official destination marketing organization for more than 30 years. Currently, Experience Scottsdale has a 5-year contract with the city that goes through 2021-22. While the contract is for a 5-year period, the organization goes before the Scottsdale City Council every year to present an updated program of work, budget and performance metrics for the coming year.
Experience Scottsdale is guided by a volunteer board of directors that includes representatives from the local tourism industry and business community. We also have community representatives, including a Scottsdale City Council member appointed by the mayor, as well as the city manager, who serves as an ex-officio member.
The Scottsdale City Council is the governing body for the city, and the seven-member council votes on issues affecting tourism. Before voting on the issues, the city council hears recommendations from city staff with the tourism and events department, as well as from the council-appointed Tourism Development Commission.
The council also sets the financial policy for how bed-tax revenue is distributed. This policy helps determine how much money can be used for special events, capital improvement projects and other tourism-related developments.
The city of Scottsdale’s tourism and events department serves as the liaison for the city’s contracts with Experience Scottsdale, Scottsdale Arts and Western Spirit: Scottsdale’s Museum of the West. The department also oversees the city’s event funding programs and research.
The TDC recommends to the Scottsdale City Council how to allocate the city’s half of bed-tax revenue. The seven members of the commission are appointed by the council following an application process. A minimum of four of the TDC members must be hoteliers.
The tourism and events department oversees Experience Scottsdale’s contract with the city of Scottsdale, and the department serves as the staff liaison for the TDC. While each group has a unique role within the tourism industry, all three groups work together on important projects and issues facing Scottsdale’s tourism industry.
Experience Scottsdale’s programs are primarily directed outside of Arizona and focus on promoting Scottsdale as a destination. The city’s tourism and events department oversees local promotions directed at driving Arizona residents to Old Town.
Old Town is an essential part of Scottsdale’s destination story. Therefore, Experience Scottsdale incorporates Old Town Scottsdale into every aspect of our programming – from marketing and communications to convention sales and tourism activities. It would be impossible for Experience Scottsdale to promote the destination without promoting Old Town and its myriad attributes and attractions.
Experience Scottsdale has a five-year contract with the city of Scottsdale that is reviewed and approved by the Scottsdale Tourism Development Commission and the Scottsdale City Council. While the contract is for a five-year period, the organization goes before the council every year to present an updated program of work, budget and performance metrics for the coming year.
In addition, regular communications via monthly email updates and quarterly reports are provided to the city’s tourism and events department, city manager and Scottsdale City Council, as well as the Tourism Development Commission. Experience Scottsdale also undergoes a financial audit every year and a city audit every five years. Plus, Experience Scottsdale has regular meetings with the city’s tourism and events department.
Via Proposition 302, Maricopa County hotels and rental car companies collect and pass along an additional tax to the state that is then split and invested in numerous projects. Experience Scottsdale receives approximately $1 million from the state annually.
In addition, Experience Scottsdale partners with the Arizona Office of Tourism on myriad projects and programs to support collective tourism efforts.
Footnotes: 1Experience Scottsdale Visitor Industry Customer Analysis 2017; 2City of Scottsdale’s Longwoods International Scottsdale 2017 Visitor Research; 3Destinations International; 4Destination marketing organizations; 5Longwoods International and Tourism Economics