Archive for March, 2012

Scottsdale sales-tax collections up 7.5% in ’11

Thursday, March 29th, 2012

Scottsdale’s economy rebounded in 2011 with healthy increases in spending for cars, construction and the vital tourism industry.

Scottsdale’s sales-tax collections totaled about $133.8 million last year, up 7.5 percent from 2010, according to figures released by the city.

It’s a slow recovery, but local consumers are showing more confidence in their spending habits on everything from coffee to car buying. Plus, an uptick in tourism has fueled spending on retail, restaurants, golf and entertainment, according to city and business leaders.

“I don’t know anyone who is jumping up and down,” restaurant consultant Robert Nyman said of the recession rebound. “It’s not like it was in 2006.”

The local economy is a long way from the high-water mark around 2007 when sales-tax collections were approaching $180 million.

A recovery to that level could take more than five years, City Treasurer Davis Smith said.

But the improved numbers are sparking some optimism and job growth.

Small businesses are hiring again and consumers are spending money on vacations and business meetings, said Rick Kidder, Scottsdale Area Chamber of Commerce president.

“I think there is momentum,” he said. “People are feeling that we hit bottom, and we’re going to keep growing.”

Among larger employers, Kidder is encouraged by the potential growth of Yelp, Fender, and West Pharmaceutical Services’ Tech Group, which is based in the Scottsdale Airpark.

Yelp, the online consumer-review site with an office in downtown Scottsdale, had a successful initial public offering March 1, raising $107 million.

The Fender Musical Instruments Corp. recently moved its corporate headquarters from the Salt River Reservation to Scottsdale’s Perimeter Center. Fender this month announced an initial public offering of its stock, said to be valued at $200 million.

Hotel rates increase

Tourism, an important driver of the Scottsdale economy, showed strong improvement in 2011 with some welcome growth over the previous year in room rates, up 6.5 percent, and revenue, up 8.2 percent, according to figures from Smith Travel Research.

Sales-tax collections from hotels, separate from the bed tax, increased 3.8 percent to $6.9 million. And hotels are reporting good numbers this year as well.

Jesse Thompson, Hotel Valley Ho sales and marketing director, said the historic downtown property is having its best March ever with occupancy at 95 percent.

More business travelers are coming for meetings, are bringing along their spouses and children, and are spending more on things like golf, said Rachel Sacco, Scottsdale Convention and Visitors Bureau president.

“As the hotels fill up, it trickles out through the community in retail and restaurants,” she said.

Restaurant tax collections increased 8.2 percent in 2011 over the previous year.

Nyman said consumers are prudent in their spending, but they are still going out.

“They’re trading down” to restaurants that are “good enough,” he said, for example going to Pei Wei Asian Diner instead of P.F. Chang’s China Bistro.

Pei Wei is a lower-cost fast-casual restaurant operated by Scottsdale-based P.F. Chang’s.

Construction pace jumps

Construction, with a 13 percent increase, showed the second biggest increase of the city’s 11 tax categories.

That includes taxes collected on the construction of the $100 million Maravilla Scottsdale, a luxury senior community set to open by this summer near the Fairmont Scottsdale Princess resort.

Other taxable activity, a category that includes movie theaters and bowling alleys, showed the biggest jump at 15.7 percent.

“Construction is coming off an absolutely abysmal performance,” City Treasurer Smith said. “It doesn’t take much to move it up from the level it’s been.”

Automotive sales-tax collections, which had been running close to $23 million four years ago, have rebounded from a skid that hit $13.8 million in 2010. That figure jumped 10 percent last year to $15.2 million.

Miscellaneous retail stores, the city’s most lucrative sales-tax category, brought it $21.9 million last year, an increase of 8 percent. That includes some fairly large stores with the exception of big-box retailers.

The only category that declined was utility collections. That reflected higher vacancy rates in commercial buildings, the city treasurer said.

In the current fiscal year, which ends in June, Scottsdale had forecast sales-tax collections of $87.9 million for the city’s general fund. But collections are better than expected and could hit $90 million to $91 million, Smith said. He is forecasting collections of $97.3 million for the 2012-13 fiscal year.

“As with the rest of the country, we’re coming out of the recession very slowly,” Smith said.

Peyton Manning—Where is the Loyalty?

Wednesday, March 14th, 2012

How can Peyton Manning’s release from the Colts apply to the hotel industry? You’re about to find out.

The biggest story in the news this past week was not what was being said or won in the Republican primaries, but what was going to happen with Peyton Manning and the Indianapolis Colts in the future.  Well, if you’re a sports fan, you are probably well aware of the outcome and that Peyton and the Colts are now divorced, going their separate ways.  I have to admit that I never was a big fan of Manning, or for that matter the Colts, since they left Baltimore many years ago, but this parting of the ways, has left me in a bit of a quandary.  Peyton as it has been written, put Indianapolis on the map, or maybe we should say on this shoulders.  Indiana before his arrival was all about Bobby Knight and basketball, but he changed that equation both on and off the field with his involvement with the local community and his sometimes overlooked philanthropic contributions.  I guess at the end of the day all that mattered to Jim Irsay, the owner of the team, was what is important to him in his mind for the future, regardless of what Manning did for him, his business and the team in the past.

We live in a world which seems to be all about the future, but sometimes we forget how and who got us to this point and success in our personal and professional lives.  I realize most of you are paid to “do a job” and some say we “should be grateful” for the opportunity and position we have.  Maybe I am a sentimentalist or just too darn respectful of the people and professionals I have worked with over the years, clients who have given us the opportunity to join them in developing a new program, concept or the people who gave me my start and assisted me along the way in the Hospitality Industry.  As we continue to evolve and grow in this industry and life itself seems to be on a faster and faster pace for change, embracing of the next big thing or concept; but alas sometimes we don’t look at the finite details, realize potential pitfalls or respect the knowledge of those who blazed the trail and are more seasoned, can offer experience, key details for growth and financial and overall success.  Now, we all should realize that change is inevitable and people move on to different positions, relationships and chapters in their respective lives, that’s just the way it is.

There is not a month that goes by that I don’t hear from a senior hospitality executive about their development plans and ideas on how they perceive the next chapter of growth and company direction; along with asking me for my input and thoughts on their program and how they can do it for less money, potential reassignment of key personnel, with elimination of some senior talent to try and save costs.  Recently, I spoke to a long term executive at a International hotel company who I have worked with many times successfully over the years about his future, as it seemed he had been deemed expendable by his current vice president and could chose to potentially be reassigned if he could find a position in the company or be outsourced, in other words released by the company.  It made me think again about how experienced and talented individuals are being relegated, tossed aside by their respective companies and organizations, and I am not so sure it is based on performance or just the idea or whim of someone in power who has the ability to do so, as it seems might also be the case with Peyton Manning.

I once was told that there was knowledge with experience and that dedicated, talented individuals are hard to find and sometimes tougher to keep.  Maybe that is changing, as we become more of a disposable society with the things we once treasured and valued as important to the success of our industry.  The next generation of great thinkers and doers will need to experience and learn from someone, but not if there isn’t anyone to train and mentor them as they go through the trials and annals of life in the world as we continue along with the repositioning that has affected the Hospitality Industry the last few years.  As companies continue to shed people and development expenses to try to become more relevant in their own image, they may want to look at evaluating where they came from, where they might be going and who will be the best at getting them to reach their goals; in other words ‘Where is their Loyalty?’


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