Phoenix Mayor Greg Stanton’s tone is upbeat, like a pitchman addressing a prospective buyer, as he takes the podium before a breakfast crowd at the massive Phoenix Convention Center.His audience, about two dozen event planners from across the country, represent thousands of potential visitors and millions of dollars in spending power. These customers require some wooing.
Stanton touts the city’s newest assets, including a light-rail system and downtown university campus. But his speech soon shifts to an uneasy topic: Senate Bill 1070, the state’s much-debated immigration law, and perceptions of Arizona’s politics.
“What you may have read about our Legislature, don’t hold against the rest of us,” Stanton says, drawing a chuckle from the crowd. “The rest of us, we’re normal. We like diversity.”
The mayor’s comments touch on perceptions that city and tourism officials say still hamper business at the convention center. As convention halls across the country have faced tough times because of the recession and tightening budgets for government and corporate travel, officials say concerns over the state’s image have exacerbated its troubles.
SB 1070 is one of several factors impacting convention business, and not everyone agrees it’s to blame for the decline. But those who book meetings for the city-owned center say it has been a slog.
Projected bookings for the Phoenix Convention Center are down by as much as 30 percent for the current fiscal year compared with 2009. The city projects about 184,300 convention guests, down from a high of about 275,400 in the 2009 budget year — a difference of about $132 million in direct spending, according to the city.
Meanwhile, other cities with comparable convention facilities, including San Diego, Denver, San Antonio and Salt Lake City, have experienced a different trend. In those locales, guest counts are slowly rebounding or relatively flat.
Although national debate of the 2010 immigration law has quieted, Phoenix officials said they are just now feeling the full impact on visitation because many large, national conferences and conventions schedule events three to five years in advance. The center is just now realizing losses from groups that removed Arizona from consideration a few years ago, when the law passed.
“The misperception that our city does not value diversity continues to be an impediment to attracting national convention groups,” said Scott Dunn, a spokesman for the Greater Phoenix Convention and Visitors Bureau. “In some cases, the damage from what happened in 2009 or 2010 won’t wash ashore until 2013 or 2014.”
Supporters of the law question any attempts to tie the convention center’s performance to SB 1070, saying that ignores other factors. Phoenix’s elected leaders, as a group, are more left-leaning on issues of immigration than their counterparts at the state Capitol.
“That’s a pretty hefty drop-off; to me, that speaks to other challenges,” said Councilman Jim Waring, a Republican former lawmaker who supported the bill. “I would be surprised if 1070 played much of a factor.”
Tracking losses tied to SB 1070 is difficult. But convention and tourism officials say it has been a frequent issue in discussions with prospective convention groups, including several that have said they will not consider Arizona because of the law.
A handful of large, national organizations publicly canceled events at the Phoenix Convention Center in the wake of SB 1070’s passage in 2010, including Alpha Phi Alpha, the National Minority Supplier Development Council and National Council of Teachers of English. The groups cited members’ concerns with the law, including that it would promote discrimination and racial profiling.
“We will not only speak with our voices and our feet, we will speak with our economic clout,” declared the then-president of Alpha Phi Alpha, a national Black fraternity, in announcing the boycott. “And we will not spend our money in Arizona and urge other organizations and people who believe in equality under the law to do the same.”
At the time, at least 14 cities across the country also announced boycotts of the state, prompting the city and visitors bureau to focus on preventing further boycotts and cancellations.
The Center for American Progress, a liberal think tank, released a study in late 2010 suggesting that more than $141 million in visitor spending was lost in the months after the law’s passage in April of that year. The report, titled “Stop the Conference,” predicted the negative impacts would continue for years.
While news of such boycotts has dissipated, some losses are apparently still hitting, and there’s also an unknown number of groups that aren’t calling. Dunn said three additional, large groups recently told the visitors bureau they were not considering Phoenix for their meetings because of the immigration issue.
The U.S. Supreme Court has struck down much of SB 1070, but a key provision was allowed to go into effect. It requires that police officers make a reasonable attempt to determine the immigration status of a person stopped, detained or arrested if there is reasonable suspicion the person is in the country illegally.
Phoenix Councilman Michael Johnson, an African-American, has worked with other leaders to combat “negative” misconceptions. He has met with organizations across the country and said many worry about how their members will be treated in Arizona — whether officers will stop them and ask for proof they are in the country legally.
“That is still a huge issue that we have,” Johnson said. “People really think and feel like that, and that (image is) absolutely not true. People are not being stopped just because of the color of their skin.”
Convention centers across the nation have struggled in recent years, though many to a lesser degree than Phoenix. Potential factors include the economic downturn and criticism of government spending on trips to “destination” locations, such as sunny Arizona, tropical Florida or racy Las Vegas.
There’s also growing competition among convention centers, particularly in the West, with several cities and companies opening giant, elaborate facilities.
Phoenix visitors bureau President Steve Moore, whose group is the city’s major convention-marketing and sales partner, said attention on SB 1070 is one of a number of factors affecting bookings. He said other challenges unique to the city include a drop in marketing funds and a reputation as a desirable getaway.
Moore said the state’s status as a “fly destination” amplifies downturns in its convention business.
Another large piece of the city’s business model was hurt by the recession: bookings of government-agency and corporate conventions. Since the downturn, such groups have avoided destinations that could be seen as lavish or as vacation spots.
Convention organizers nationwide have dubbed it the “AIG effect,” a reference to public outcry over the insurance company sending executives to an upscale California resort less than a week after the government agreed to an $85 billion bailout of AIG in 2008.
Cutbacks in government spending for conventions has continued to have an impact on Phoenix’s bookings. The Association of Military Surgeons of the United States canceled its 4,500-delegate meeting to be held this past November. Moore said the organization backed out because of budget concerns.
He said these factors have created “headwinds” for Phoenix’s young convention center. Phoenix did not open its full facility until late 2008, just as the economic crisis took hold.
Recovery in sight
Phoenix and tourism officials said they have scored several major bookings that suggest the city is recovering or at least has avoided a more dire situation. They pointed to Major League Baseball’s All-Star FanFest in 2011, the International City/County Management Association conference in October and events associated with the 2015 Super Bowl.
Phoenix City Manager David Cavazos said that when he became the city’s top executive three years ago, city officials projected the convention center would be in the red this fiscal year. Today, they expect the facility to cover its expenses until at least 2019, which Cavazos attributes to the creativity of city staff.
“We’re on the rebound,” he said. “We had a few people cancel, but not anywhere near what people thought.”
He said rather than waiting for organizations to call, the city cut expenses and pursued local trade shows and events to fill the void. Such events aren’t included in the convention-attendance totals because they have a much smaller economic impact on hotel and other spending.
The visitors bureau has beefed up marketing as its budget has been restored. In October, Stanton and others traveled to Washington, D.C., for Phoenix’s first major event with convention organizers since 2008.
For his part, Stanton said the city must tout its diversity to lure business tourism. He has attempted to do that by spreading the word about the city’s perceived strong points: a perfect credit rating, eco-friendly programs, a young population, an emerging downtown and a vibrant arts community.
“You’re going to be having your meeting in an advanced, progressive city,” Stanton told the group of event planners. “We’re a city on the rise.”
Phoenix Convention Center