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Peak tourism season in metro Phoenix usually means sunburns, spring training and sticker shock.
Except for this year. The sun and baseball are still fixtures, but sky-high prices night in, night out, are mostly a memory. Hotels and resorts from Litchfield Park to Scottsdale, socked by the economy and the country’s biggest jump in room supply, have slashed rates or added freebies to lure vacationers and business groups.
Call it the hospitality industry’s economic-stimulus plan, an effort to save a season that financially carries tourism-dependent businesses through the summer doldrums.
Hotels and resorts that routinely command $300 to $500 a night during the winter are on sale for 15 percent to 20 percent off, with some dangling rates of $199 a night and less on select dates, as well as previously unheard-of last-minute deals.
The Arizona Biltmore Resort and Spa has rooms for sale on Expedia.com for as low as $179 a night during the second week of March, the peak of the peak season. Stay a minimum of four nights, and the resort will throw in a $50 gift card.
The new InterContinental Montelucia Resort and Spa in Paradise Valley is offering rates on Travelocity .com starting at $195 a night in early March.
Hotels normally in those price ranges, such as the Hilton Scottsdale Resort and Villas, suddenly find themselves battling luxury competition they never had to worry about, on top of the recession. The result: Rates that have dipped below $100 a night on certain dates – rates normally seen only in the summer.
“The season as we know it is not happening,” said Susan Baer, area director of sales and marketing for the Hilton and its sister Scottsdale Road resort, Doubletree Paradise Valley.
Steve Moore, president and chief executive officer of the Greater Phoenix Convention and Visitors Bureau, is even more blunt.
“We’re in a very horrible situation,” he said.
Industry officials say the circumstances are more dire than after the 2001 terrorist attacks because the economic downturn is longer and more far-reaching.
“This is just in every facet of life,” Baer said.
The greater Phoenix hotel market registered the biggest drop in occupancy among 25 major markets last year, down 11.5 percent, according to Smith Travel Research. It also registered the biggest decline in revenue per available room, down 8.3 percent.
The pain has continued into 2009.
In the week that ended Feb. 14, which included the first part of the NBA All-Star festivities, occupancy was down 15.9 percent, with the average daily rate off 2.4 percent and revenue per available room down 18 percent, according to Smith Travel.
Year-to-date figures are not yet available, but preliminary estimates for January show Greater Phoenix with among the biggest declines in all the major categories, especially revenue per available room. Those figures are skewed somewhat by the 2008 Super Bowl in Glendale.
The area has taken a disproportionate hit for several reasons, the biggest being a significant increase in hotel rooms for sale. Metropolitan Phoenix led the country in room-supply increases in 2008, at 4.4 percent, thanks to the opening of W Scottsdale, Montelucia and the 1,000-room Sheraton Phoenix Downtown Hotel, among others.
No other major city topped 4 percent. The U.S. average was 2.7 percent. Big newcomers opened late in the year, making this their first peak season.
Other factors:
• Luxury hotels dominate the landscape, and they have been the segment hardest hit by the Wall Street meltdown and general economic malaise. In January, occupancy in that category nationally was down 15 percent to 17 percent. Revenue per available room was off 22 percent to 24 percent, according to Smith Travel. That compares with averages of 10 percent to 12 percent and 15 percent to 17 percent, respectively.
One reason: Big businesses, which fill a majority of the rooms at the area’s largest resorts during peak season, are cutting back on their meetings and incentive trips because of the weak economy and increased public scrutiny of lavish events.
• Phoenix also has the disadvantage of being a fly-in destination. People have the added expense of an airline ticket to get here, and until recently, airfares were up sharply because of dramatic flight cutbacks by airlines coping with high fuel prices and, now, the recession.
“We don’t enjoy a huge population within 300 miles of greater Phoenix that many other destinations do have,” Moore said, citing California, Florida and Texas as examples of states that do. “That puts us at a disadvantage when these crises occur.”
In response, the Phoenix convention bureau this weekend launched its first-ever peak-season promotion of bargain room rates. The “Spring Stimulus” promotion at visitphoenix .com/springstimulus features a roundup of hotel and restaurant deals.
It is aimed at visitors and local residents and businesses seeking a bargain for a getaway or a meeting, something normally out of reach until the temperature creeps past 100 degrees and stays there for weeks.
The bureau has stepped up efforts in Southern California, too, to lure more spring-training fans given the addition of the Los Angeles Dodgers to the Cactus League. It also is targeting more trade associations, which meet once a year in good times and bad.
Potential tourists and business groups are getting a similar sales pitch from the hotels themselves.
“This is probably the best time in recent history to come to Scottsdale and the Phoenix market,” said Clark Albright, director of sales and marketing for the luxury Camelback Inn, a JW Marriott Resort and Spa in Paradise Valley.
“You’ve got all these four- and five-diamond hotels with distressed inventory.”
Albright said Camelback Inn is holding up relatively well because there was a lot of pent-up demand from regulars who stayed away last season during its $50 million renovation. It is seeing a payoff from a marketing and PR blitz about the makeover of its rooms, restaurant lineup and lobby. Still, its rates are far from usual levels.
Camelback Inn has extended its renovation introductory offer of $299 a night into peak season, which is down from the high $300 to low $400 range during the renovation a year ago. Its golf business is off 15 percent to 20 percent despite a decrease in rates of 25 percent.
Pete Ells, general manager of Royal Palms Resort and Spa, said that the luxury boutique resort in Phoenix surveyed its competitors’ leisure rates and found they each were down about $90 to $100 a night.
That’s not to say they’re giving away rooms. Top-of-the-line resorts command $400 to $500 a night and more on certain March dates with big demand.
Royal Palms and others are having to fill rooms with more vacationers than normal because of meeting cancellations. Ells said the decline in meeting attendance at Royal Palms, which gets 70 percent of its business from groups in peak season, has averaged 10 percent.
Albright said attendance at a doctors’ association meeting, a regular peak-season client, was off 45 percent as companies sent fewer representatives or skipped it altogether.
Resorts are using online travel agencies and discounters more than they have in the past during peak season. Albright said about 80 percent of Camelback Inn’s leisure business comes through Marriott reservations channels. That figure will drop to about 70 percent by the end of March as it sells rooms on Expedia.com and other Web sites.
“We’ve got to get our product on the shelf at a lot of different places in order to get the occupancy we want to get,” Albright said.
The sprawling Arizona Grand Resort, off Interstate 10 and Baseline Road in Phoenix, last week advertised on Travelzoo.com a special of $199 a night that included free golf, a $30 dining credit and $20 toward a massage. A year ago, the resort’s lowest price was $250, and that didn’t include freebies, managing director Richard Behr said.
“Everybody is prospecting,” he said.
More resorts are selling a limited number of rooms at fire-sale prices through deep discounters like Hotwire.com, where travelers don’t find out where they are staying until they’ve agreed to the price and location.
Winning bids for March stays include rates as low as $40 a night at Hilton and $70 at the newly renovated Hyatt Regency Scottsdale Resort, according to Web sites that track them.
Baer said, “We did not participate in those last year. We didn’t have to.”
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, says there are even more opportunities than usual this year for travelers interested in spring training. For one thing, “this is the longest spring training period in years,” he said. In addition, he said, ticket sales “are a little bit slower because of the economy.”
The Cleveland Indians will also leave Florida in 2009 for Arizona spring training at the new $56 million Goodyear Stadium, on Phoenix’s southwestern border.
Glendale Stadium
Goodyear Ballpark
Hohokam Stadium
Maryvale Baseball Park
Peoria Sports Complex
Phoenix Municipal Stadium
Scottsdale Stadium
Surprise Stadium
Tempe Diablo Stadium
Hi Corbett Field
Tucson Electric Park
New villas cap renovation of Arizona Grand Resort
