Waste Management Open

Visitors to Scottsdale, like those who attend the annual Waste Management Phoenix Open, contributed $35.7 million in privilege tax revenues last year to the city.

Tourism is still Scottsdale’s cash cow as visitors spent over $2 billion in the city last year, according to the city’s latest tourism report.

Direct spending by domestic visitors was up slightly in 2018 over the previous year. 

In 2018, domestic visitors spent $1.65 billion in Scottsdale, an increase of about six percent over 2017.

The report also shows foreign visitors spent over $444 million in Scottsdale in 2018 – bringing the total direct spending by all visitors in the city to $2.1 billion.

The report issued by the city in 2018 did not include foreign visitor spending numbers for 2017.

The report also concluded more visitors overall came to Scottsdale in 2018 than year before.

Nearly 10.8 million people visited Scottsdale in 2018 – including foreign and domestic overnight visitors and day-trippers. The 9.1 million domestic visitors who came to the city in 2018 is an increase of nearly 200,000 visitors.

In 2018, the city brought in $35.7 million in privilege tax revenues related to domestic and international visitor spending, which accounted for 18 percent of the city’s total privilege tax collections.

In 2017, the city reported $26 million in privilege tax revenues attributable to visitor spending, but those numbers only accounted for domestic visitors.

Domestic and international visitors spent their money differently in Scottsdale.

Overnight domestic visitors spent a total of $1.3 billion in Scottsdale last year and allocated the majority of their spending – 41 percent – to lodging. They spent 27 percent of the money on food and beverage and 12 percent on retail.

The stats indicate Valley locals traveling to Scottsdale for the day were attracted by the city’s dining scene and shopping.

Day-trippers spent $314 million in Scottsdale last year and allocated 41 percent of spending on food and beverage and 29 percent to retail.

International visitors, who spent $444 million in Scottsdale, spent 41 percent of their money on retail.

International visitors also allocated significant amounts of money towards lodging (25 percent) and food and beverage (21 percent).

Unsurprisingly, visitors accounted for nearly all of the city’s bed tax revenues in 2018. Bed tax, or transient lodging tax, is assessed on hotels and motels.

In 2018, the city brought in $22 million in bed tax revenues related to visitor spending, 99 percent of the city’s total bed tax haul for the year.

The occupancy rate at Scottsdale hotels was up year over year in 2018, according to the city.

In 2018, the occupancy rate of Scottsdale area hotels was 70 percent, up from 68.3 percent in 2017. 

The rate could drop in coming years due to increased competition spurred by a hotel building boom in Scottsdale.

Earlier this year – following the announcement Caesars Entertainment would build its first U.S. nongaming hotel next to Scottsdale Fashion Square – the Progress reported there were 10 hotels in various stages of development in downtown and southern Scottsdale.

Other hotels under construction include a luxury hotel at Museum Square, Element Scottsdale at Sky Song and the under-construction hotel on the old Don and Charlie’s restaurant site.

The competition from new hotels could be tempered if state lawmakers roll back a 2016 short-term rental law largely prevents cities from regulating the use of platforms like Airbnb and VRBO to rent residential properties to visitors.

The city’s tourism report indicates 16 percent of domestic visitors to the city last year did not stay in hotels or motels and stayed in “other or unknown accommodations”.

Two Democratic lawmakers have already crafted legislation repealing the 2016 law entirely, giving municipalities back the power to regulate short-term rentals.

Rep. John Kavanagh, who represents much of Scottsdale, is not involved with the legislation but is chairing a separate bipartisan group looking into the short-term rental issue.