Hotel rooms

Tempe adds hotel rooms as tourism industry recovers

“As a hospitality industry, and around the world, we’ve had to find ways to get on and off this roller coaster and navigate it as best we can,” Kirby said. “We had occupancy issues. We would see it 100% at [Arizona State University’s] parents’ weekend, then drops to 30% or 40% occupancy the following weekend. Fortunately, I feel like we are picking ourselves up and have a bright future.

The Westin Tempe was one of two new hotels to open in the past 12 months in Tempe, the other a Best Western product called The Vib, which opened in March. The Canopy by Hilton opened in downtown Tempe in June 2020 and another hotel, the Omni Tempe Hotel, is under construction. By spring 2023, the city will have added approximately 1,000 new hotel rooms to its existing inventory.

Michael Martin, interim president and CEO of Tempe Tourism, said Tempe’s hospitality industry was hit hard by the pandemic in 2020, with hotel occupancy rates declining across the board. Visits fell 32.5% in 2020, according to data from Tempe Tourism. Visitor volume fell to 2.8 million from 4.2 million the previous year.

“We’re a business destination,” Martin said. “Before the pandemic, our business stays constituted the majority of our occupation. During the pandemic, business travel has dropped significantly. But we’ve seen something interesting, and that’s that our leisure travel is overtaking business travel in the recovery from the pandemic. I think there was a pent up demand for people to get out of their bubble.

Martin said he’s optimistic that as events continue to draw people to Tempe and businesses resume travel and in-person meetings, the local hospitality industry will continue to improve.

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Martin said that while business travel has yet to return to Tempe, the industry is doing well despite that.

“When business travel comes back, at this point, that will be the icing on the cake,” Martin said.

Martin said local hotels, especially those near downtown Tempe and Tempe Town Lake, are seeing increased interest in their meeting spaces for conferences and that over the past two months, more business trips took place nationally and locally.

“It’s a sign that we’ve turned a corner,” Martin said.

There’s more diversity in the kind of travelers Tempe sees than you might think, Martin said.

“I don’t think people understand that not all of our travels are due to ASU alone,” Martin said. “People come here for a getaway or an event. ASU plays a role, [but travelers come for a variety of reasons.]

Jill Buschbacher, economic development program manager for the city of Tempe, said city events play such an important role in tourism that with events canceled and postponed during the pandemic, the industry has been hit hard. .

“Events bring so many of our visitors to Tempe,” Buschbacher said. “It was difficult during the pandemic.”

According to data from Tempe Tourism, hotel occupancy fell to 45.6% in 2020 from 73.3% in 2019. The average daily room rate also fell by around 9% in 2020, according to the data.

In 2021, Tempe’s hotel occupancy rate increased to 61.7%, according to data from Tempe Tourism. Buschbacher said tax revenue from tourism has also increased.

More than hotel stays

Colin Diaz, president and CEO of the Tempe Chamber of Commerce, said the economic impact of tourism in the city of Tempe is widespread beyond hotel vacancy rates.

“For small and medium-sized businesses, foot traffic is essential,” Diaz said. “People staying in hotels might wonder where the best places to go are. When there are more people in the area, it’s good for these businesses; just like word of mouth.

Buschbacher said tourism is a vital part of the city’s economy. Visitors to Tempe spent nearly $884 million in 2019, 3.8% more than in 2018. These direct spends generated $1.2 billion in total sales, including indirect and induced impacts, according to Tempe Tourism.

Hotel stays also generate tax revenue for the city. In January, the city generated $1.8 million in tax revenue from hotels and motels, according to city records, a 120% year-over-year increase.

The temporary relocation of NHL games from the Arizona Coyotes to ASU is also expected to impact tourism in the city. The hockey team is in talks with the city of Tempe about a potential facility in Tempe after leaving its Glendale facility in the spring of 2022. Diaz said talks are still “fluid,” but if an arena is built, it would certainly have an impact on tourism in Tempe.

“It would bring a lot of jobs; I think the estimated economic impact is $10 [million] or $11 million a year,” Diaz said. “It could generate construction jobs, jobs on the site, it would be another attraction for the city. … There are still many conversions to be made, but this could have an impact on tourism in the city.

Martin said Tempe is very much a destination for visitors, and he expects that if pandemic conditions remain the same, the city’s tourism industry is poised to rebound well.

“With ASU, sports, meeting space, our outdoor amenities, museums, ASU Gammage and the Tempe Center for the Arts, we are a destination,” Martin said. “I think we will continue to see demand increase.”