River Cities Business Journal: Tourism

Today's News-Herald

LAKE HAVASU CITY - Local hotels closed out a bumpy summer by posting moderate gains in August, a sign that tourism hasn't been as hard hit by the recent economic volatility as other parts of the local economy, officials said.

Hotel revenue in August rose $127,000, or 5.6 percent, to more than $2.3 million, the highest total for that month since 2003.

But for the summer, revenue fell more than $600,000, or 8 percent, according to figures released by the city's Finance Department.

Economic worries are a safe bet for why hotels didn't fill up as often as last summer, said Jarrod Lyman, vice president of the Lake Havasu Convention and Visitors Bureau.

“Any downturns you do see are only going to be temporary,” he said. “People are always going to come here to visit.”

Lisa Krueger, director of the Lake Havasu Area Chamber of Commerce, saw the relative stability of the tourism industry as a positive sign.

“It's showing that restaurants, hotels and motels are holding their own in spite of what's happening in the local economy,” Krueger said.

Construction, real estate and sales tax figures have all plunged in the past year. Officials said the downfall appears tied to the collapse of the subprime mortgage market and the end of the national housing boom.

Economic conditions have affected tourism, Lyman said, just not as much as other sectors. The biggest change, he said, has been that tourists are now taking shorter, closer trips to home. The Visitors Bureau has countered by marketing more to in-state travelers.

“There's always opportunities in any type of market,” Lyman said. “Lake Havasu City will always be a strong tourist destination.”

The city charges a 3 percent bed tax on every hotel bill. That revenue, combined with a 1 percent restaurant and bar tax, goes to the Visitors Bureau and the Partnership for Economic Development.

The CVB gets 75 percent of the lumped revenue; the PED gets 25 percent. The CVB uses that revenue to try to attract more tourists, mostly through marketing and advertising. The PED, meanwhile, tries to attract new businesses to the city.