A mild recession could be in store for the first half of next year, according to Tourism Economics President Adam Saks.
The economist troubadour spoke – and sang – to almost 300 people at the Experience Scottsdale annual meeting on Oct. 20.
In addition to just presenting facts in a lecture, he also sang songs about Scottsdale’s tourism economy to the tunes of popular songs like “Where the Streets Have No Name” by U2 and “On the Road Again,” by Willie Nelson.
He said the history of the tourism industry over the last couple years has been “an epic.”
“What an odyssey over the last two and a half year?!” Saks said. “You have experienced what truly, I think — we can hope — will go down in history as the most colossal downturn our industry has ever faced and the most dramatic recovery we’ve ever experienced as well.”
That recovery won’t last forever though.
“After growing again, what we’re doing right now, we think by the time we get to early 2023 the economy growth trajectory is going to come to a halt,” Saks said. “We’re going to experience two consecutive quarters of negative GDP (Gross Domestic Product) growth and with that, the economy is going to soften across the board in such a way that it becomes a technical recession.”
But the news isn’t all bad.
“In our view, it will go down as one of the milder recessions in U.S. economic history going back to post World War II,” Saks said. “Peak to trough, that is what is the GDP at the end of this year versus where it will be in middle of next year, we think the U.S. economy is going to contract about 1%. That puts it on par with a very mild down turn, such as what was experienced in 1991.”
Saks also shared with the crowd some reasons why he thinks Scottsdale’s tourism industry “will be fine” through the recession. Those reasons included: no signs of weaknesses yet, U.S. households were able to save tremendously during the pandemic, pent up consumer demand and businesses are still restoring necessary travel.
In the meantime, the staff of Experience Scottsdale was hard at work making the past year the best it could be.
“Last fiscal year, for us at Experience Scottsdale, we’ve certainly faced some major changes, and yet … the biggest change of all might have been the simplest one, which was, frankly, trying to resume business as usual after a fiscal year that was anything but business as usual,” Experience Scottsdale CEO Rachel Sacco told the crowd.
“We were so thrilled we could open, reopen really, our visitor centers, that we could actually return to conferences and trade shows, that we could ramp up our mission, that we could have site visits and FAM tours and bring customers in. And you know what? The thrilling part of all that was the results … began to show.”
The communications team hosted 240 representatives of the media on press trips last year – “a 180% increase over the year prior,” Sacco said.
And the tourism team conducted 38 product training events to teach over 1,600 travel advisors what the Scottsdale/Paradise Valley area has offer.
And after a two-year delay, Experience Scottsdale revived it’s largest and longest meeting planner familiarization tour — which shows planners that book conferences and such around Scottsdale’s resorts and amenities in a whirlwind visit.
Called the “Sensational FAM,” it’s been running for 33 years.
But the tourism industry also showed signs of evolving.
“These programs and these initiatives have really carried the day for use for over 35 years,” Sacco said. “It’s been what we do and how we stimulate this economy, and yet, they felt last year so novel … more impactful than ever before. So as we hit the road, as we conducted sales calls and crafted itineraries, we couldn’t quite return to business as usual as in 2019.”
But that isn’t new for the travel industry, which has always evolved and will continue to do so into the future, she said.
“We needed some new opportunities to tell this destination story in new ways that would speak to those travelers and those meeting groups, and we did just that,” Sacco said.
So Experience Scottsdale carried its message to all of it’s major domestic markets including traditional markets with flights to and from Phoenix and Scottsdale.
“Thanks to new funding opportunities with the Visit Arizona Initiative … we regained valuable market shares in one of our most important domestic markets, New York City,” Sacco said.
Experience Scottsdale advertised to New Yorkers during their daily commutes, marking the agency’s first out-of-home advertising campaign in over two years.
That campaign generated over 19 million advertising impressions as Experience Scottsdale strategically placed its ads in high end transit stations throughout New York City.
Experience Scottsdale also entered new markets and new geo-tracking data began to show travelers from those new markets were actually coming to Scottsdale.
Experience Scottsdale also leaned into digital advertising in a way it never had before.
“That allowed us to be so agile in testing those messages and those markets, making sure we were on track and we were able to reach a larger audience in both those tried and true markets we’ve always been in but also in those new, emerging markets,” Sacco said.
The agency also launched new partnerships with travel agencies like Hopper and Kayak, allowing it to directly target consumers in the early stages of booking.
And how Experience Scottsdale reached consumers shifted as well. While television remained an important an important medium, the agency also followed consumers into streaming services.
That enabled the communications team to continue building relationships through local trade shows and local client events, while also hitting new markets like Austin and Orlando.
On the communications side, the agency leveraged relationships with broadcast experts and television personalities during summer and holiday eve time periods.
“We conducted satellite media tours and reached cities throughout the U.S. – ones we’ve never actually been in before, as an example, St. Louis and Las Vegas,” Sacco said.
Experience Scottsdale was even able to work with “The Jet Set” television show.
That aired over 1,000 times across 200 markets in the U.S. Experience Scottsdale also aired a similar show across Canada.
“Once international travel got the official green light for people to enter Canada and exit, we knew we would face robust competition from our fellow U.S. destinations,” Sacco said. “But thanks to this new emphasis that we’ve had on digital promotions, we now have a year-round presence in that important market of Canada.”
Meanwhile, the tourism team increased overseas marketing by running 20 campaigns that encompassed markets in Germany, the United Kingdom and France. Thousands of travel planners and consumers received newsletters and marketing material from magazines as part of that campaign.
“One such partnership was with Abercrombie & Kent (luxury travel agency) – maybe a familiar name to you,” Sacco said. “And that landed us really great and valuable advertising space inside the famous Barrett’s Department Store (in the U.K.) in May.”
Golf saw a surge last year and Experience Scottsdale also partnered with television show “Breaking Par.”
“We produced a brand-new series on Scottsdale golf as well as new TV commercials that will reach 80 million households across 21 regional sports networks,” Sacco said. “We are all on this golf in Scottsdale.”
Also, during this last year, the agency’s “Extraordinary Memories” commercial surpassed 1 million views, a feat never before accomplished. And to build on that, the agency produced its “Let’s Get Together” commercial, which showcased the energy and diversity Scottsdale boasts.
The agency took steps to increase diversity, equity and inclusion across all areas of Experience Scottsdale, both internally and externally – including producing new imagery for the website and a new, upcoming video.
A customer advisory board helped Experience Scottsdale glean information about the meetings market and focus groups from multiple industries showed planners rely even more than ever on agencies like Experience Scottsdale.
Experience Scottsdale also touted that it was also chosen by the HelmsBriscoe’s Company (a third-party agency that lines up travel plans for conferences and conventions) as the 2021 destination partner of the year.
Because of relationships like that and the team’s sales efforts, Experience Scottsdale generated over sales 2,300 leads, an 85% increase over 2020.
“We even brought some participating businesses on the road with us to trade shows, like when the Native art market made their debut at IPW,” Sacco said. “That is the largest and most important international trade show in our country.”
Experience Scottsdale has also worked with the city on a five-year tourism and events strategic plan while simultaneously working to be more environmentally sensitive.
“One strategy in particular that our team is very excited about getting involved with is the positioning of Scottsdale and Paradise Valley as a thought leader in sustainable tourism,” Sacco said. “Sustainability has become so much more important to leisure groups as well as meeting groups. According to Expedia, eight in 10 travelers want to travel more sustainably and more responsibly.
“They just need better guidance on how to do it, so over the coming years, Experience Scottsdale aims to provide much better resources and guidance to our visitors and our meetings groups on how to travel to this destination more responsibly.”