TOURISM IMPROVEMENT AREA

Tourism Improvement Area | Experience Scottsdale Wireframe

Staying Competitive: Forming the Scottsdale Area’s Tourism Improvement Area

Why it matters

A healthy tourism economy benefits everyone.

Every year, millions of visitors explore the Scottsdale area, but our warm sunshine, diverse landscape and special events alone didn’t bring them here. Some of those travelers came for conferences. Others booked trips at the recommendation of travel advisors. And many were inspired to visit after seeing blog posts, digital ads, magazine articles and television commercials.

Building and maintaining a thriving tourism industry requires branding, advertising, convention sales, public relations and more. Behind those efforts is Experience Scottsdale, the destination marketing organization working year-round to ensure Scottsdale and Paradise Valley top the list for travelers planning their vacations and for corporations booking their meetings and conferences.

Tourism contributes to our vibrant, thriving communities by putting our neighbors to work, reducing the tax burden on families, and generating much needed funding to invest in public safety, transportation and other community priorities. When the Scottsdale area’s visitation increases, so do those benefits.

Yet tourism is a fiercely competitive industry, with hundreds of other destinations also vying for the world’s attention. To help Arizona destinations remain competitive, the Tourism Improvement Area Act (HB 2950) was signed into law, giving Arizona municipalities, counties and lodging businesses a new tool to collectively promote tourism; attract overnight visitors, conventions and events; and ultimately strengthen and grow local economies.

Now, Experience Scottsdale, together with local hoteliers, is beginning the process of exploring the formation of a Tourism Improvement Area for our destination. Success will require collaboration among Experience Scottsdale, our hotel community, and the municipalities of Scottsdale and Paradise Valley around a shared goal: strengthening our tourism economy for the future.

We all benefit from a healthy and sustainable tourism industry, and this new tool will help increase the resources we need to better compete on the world’s stage for meetings, conventions, events and leisure travelers.

The details

Frequently Asked Questions

Select a question to learn how a TIA works, how it would be formed and how funds would be managed.

Background

What is Experience Scottsdale?

Established in 1987, Experience Scottsdale is a private, 501(c)6 nonprofit known as a destination marketing organization. Working on behalf of both the city of Scottsdale and the town of Paradise Valley and representing over 400 tourism businesses in the region, Experience Scottsdale is the sole organization responsible for promoting Scottsdale 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 visitor and group dollars land in our community.

Why is tourism promotion important?

Any destination that holds tourism as a priority in their community has a destination marketing organization like Experience Scottsdale. Destination promotion has a profound impact on community vitality, helping build vibrant, thriving communities that draw people in and keep them coming back. Experience Scottsdale’s promotions are proven to fill hundreds of thousands of room nights with high-value leisure visitors who might not have otherwise come to Scottsdale. Our destination promotion is effective at inspiring interest in the Scottsdale area, growing tourism and supporting local businesses, with every $1 spent on advertising generating $214 in visitor spending and $7 in city tax revenue.

The fundamentals

What is a TIA?

A Tourism Improvement Area (TIA) is a private sector-driven initiative designed to boost the local economy by enhancing tourism marketing and promotion. Through self-assessment from hotels and resorts within a designated area, a TIA creates a dedicated fund to attract more visitors, increase spending, and support local jobs.

A TIA’s mission is to promote and improve tourism in the designated boundaries. A small assessment is added to overnight stays at lodging businesses participating in the TIA, with the funds raised used only for specific tourism marketing and sales purposes.

Do other destinations have TIAs?

There are currently 219 TIAs nationwide in 26 states. Many cities and counties are currently in the process of forming new TIAs. Collectively, TIAs are raising over $811 million nationwide for tourism promotion.

Why do Scottsdale and Paradise Valley need a TIA?

Tourism is a fiercely competitive industry, and Experience Scottsdale is competing against destinations that have budgets that are two to three times larger. Experience Scottsdale is largely funded by transient lodging taxes collected by the city of Scottsdale and town of Paradise Valley, and such traditional funding sources are not enough to sustain the level of marketing needed to remain competitive. With many competitive destinations having established TIAs, the funding disparity continues to widen.

A TIA for Scottsdale and Paradise Valley will increase funding specifically for tourism promotion, while also providing the destination with a diversified, predictable and stable source of funding. By empowering local businesses to lead the way, the TIA will strengthen the area’s economy and ensure we remain competitive in the national and global tourism markets.

Who pays for the TIA?

The assessment will be paid by guests who stay overnight (for 30 days or less) at participating hotel and resort properties within the designated TIA.

Isn’t this the same as the transient lodging tax?

No, the TIA will be funded by assessment, not taxes. The assessment is industry-driven, and the funds will be used solely for tourism programs and activities, such as advertising and promotion, that directly benefit the lodging businesses paying them. Unlike transient lodging tax revenues, which support a variety of tourism-related and municipal needs, TIA assessment revenues provide a dedicated funding source for programs designed to generate business for participating lodging properties.

Who benefits from the TIA?

According to Tourism Economics, destinations with TIAs experience an average 2.1% increase in hotel room demand and a 4.5% increase in hotel room revenue compared to destinations without them.

While programs and promotions established in the Tourism Improvement Area Plan will directly benefit the participating hotels and resorts, the benefits of increased visitation and visitor spending will extend beyond lodging businesses. Increased tourism will benefit diverse sectors like retail, dining, arts and culture, and even agriculture and professional services.

This growth also will enhance the quality of life for Scottsdale and Paradise Valley residents by supporting local businesses, generating tax revenue and helping fund essential public services such as police, fire and parks.

Formation

How will the Scottsdale & Paradise Valley TIA be formed?

The Scottsdale & Paradise Valley TIA will be formed under Arizona’s new Tourism Improvement Area Act. The law establishes a thorough public process involving participating lodging businesses and the municipalities of Scottsdale and Paradise Valley. As part of that process, a Tourism Improvement Area Plan will be developed defining the TIA’s parameters, including its boundaries, activities funded, budget, assessment rate, district term and governance structure. Once the required level of hotel support has been demonstrated, the proposal will move through the municipal review and public hearing process required under state law.

How many petitioners are required to form a TIA?

While the law requires the petition to be signed by at least two lodging businesses within the proposed TIA boundaries, the goal during the formation process will be to build broad support and collect signed petitions from as many hotels and resorts as possible within the TIA boundary defined during formation.

What is the timeline for the TIA?

The TIA formation is a thorough process that will involve ongoing work with hoteliers, the city of Scottsdale and the town of Paradise Valley throughout the 2026-27 fiscal year. The timing of individual steps will depend on the progress of the formation process and required municipal actions.

Management

Who is leading this effort?

Experience Scottsdale will work with the Tourism Improvement Area Steering Committee, a group of engaged stakeholders and members of Experience Scottsdale’s Board of Directors who represent Scottsdale and Paradise Valley hotels and resorts. The Steering Committee’s mission is to develop consensus around key issues, guide the development of the Tourism Improvement Area Plan and guide the direction of the TIA.

Is there a written document governing the TIA?

Yes. The TIA will be operated in accordance with a Tourism Improvement Area Plan. The Plan will be prepared by the Steering Committee and approved by participating hotel and resort properties during the TIA formation process. The Plan will include the proposed programs and activities, as well as the budget, boundaries, term, assessment rate, and management for the TIA.

Can municipalities use assessment money for whatever they want?

No. The money raised with the assessment must be used in accordance with the provisions of the TIA Plan. The money cannot be diverted to the city or town’s general funds or spent for any purpose other than those given in the TIA Plan.

Is the TIA permanent?

No. The law allows the TIA to be in place for a maximum of 10 years. The TIA may be renewed if assessed lodging businesses support continuing the TIA programs.

What kind of oversight is there?

Once formed, the TIA will be governed by an Owner’s Board made up primarily of lodging business representatives from assessed properties within the TIA boundaries, with the municipalities each allowed a nonvoting, ex-officio seat. The TIA will be created, funded and managed by participating hotel business owners.

As the destination marketing organization, Experience Scottsdale will handle day-to-day management and implement the TIA programs and activities pursuant to the Plan. Experience Scottsdale will file an annual report with the participating municipalities each year, per the law.

Budget

What will the assessment be?

At this phase in the process, Experience Scottsdale and the Tourism Improvement Area Steering Committee will determine the cost of proposed services and the assessment rate. The basis for calculating the assessment will most likely be a percentage of room rental revenue.

How much money would the TIA raise?

The TIA budget will largely depend on what lodging businesses participate in the district, and at what assessment rate. Based on initial discussions, the TIA could raise anywhere from $9 million to $13 million annually.

Destination competition

The funding gap is real.

Here’s how Experience Scottsdale’s budget compares to some of our competitive markets. Experience Scottsdale competes for visitors, meetings and events against destinations with significantly larger budgets.

Budget shown in millions. Source: Civitas Pro.

Where the process goes

Next Steps

Over the coming months, the Tourism Improvement Area Steering Committee will conduct outreach and build consensus with Scottsdale and Paradise Valley hoteliers. The Committee will develop a draft of the Tourism Improvement Area Plan, including the assessment methodology and district parameters. The Plan will be refined based on input from lodging business owners.

The Plan and hotelier petition will move through the review and approval process required under state law, with both the city of Scottsdale and the town of Paradise Valley participating in the process. Public hearings will be held as required before the TIA can be formally established.

Following formation, the TIA will be mapped, and participating lodging business information will be submitted to the Arizona Department of Revenue. Lodging business assessment collection will begin after the necessary formation and administrative steps are complete.

Hotel & resort community

How to Get Involved

If you are a Scottsdale or Paradise Valley hotel representative hoping to learn more and join the Tourism Improvement Area petition, please use the contact form below. An Experience Scottsdale representative will reach out to you.