Low Valley Summer Resort Rates Could Mean Recovered Economy

July 12, 2013

Tourism is slowly rebounding nationwide as the economy starts to recover.

Phoenician The Phoenician Hotel and pool. (Photo courtesy of The Phoenician)

In Tucson, the annual Governor’s Conference on Tourism wraps up Friday.  Among the topics on the agenda  were tapping into emerging markets and using social media, but here in the Valley, the agenda is slightly different.

Children splash and play in the pool. That frivolity was happening outside. In Phoenix. In the summer.

And, Denise Seomin with the Phoenician Resort in Scottsdale, where those kids were cavorting, said their families got a deal.

"During our peak season, you’re probably looking at a starting rate of anywhere between $500-$600 a night," Seomin said. "But again, in the summer, where we’re going after that local market and providing that value, you’re looking at starting rates of about $199."

Seomin answered questions on a recent afternoon. Yes outside, underneath a hard-working bank of misters. She said even during the recession, the Phoenician did not drop its summer rates too much.

"There were some discounts, some savings, but not a huge dip, because we are a luxury property, we have a high standard of service, so in maintaining that integrity we didn’t want to lose that by going to a rate that was so low that it could affect that," Seomin said.

"Rates for summer really have not changed much at all," Marty Bertone with Hotel Palomar Phoenix said.

Palomar Hotel Palomar in Phoenix opened in June 2012. (Photo by Mark Brodie-KJZZ)

It opened last June at CityScape, although Bertone worked in the hotel biz in Phoenix for more than a decade. Like many area hotels and resorts, Bertone said most of his summer guests are from the Valley.

Bertone said warm-weather rates range from $99 to $159 a night. In season, rooms can run up to $300 a night.

"You know, right after the recession, yes, everybody panicked, and people were dropping rates just to get bodies in the door," Bertone said. "But, what you find is that even without the recession, you’re still trying to fight to get business to come here in the summer."

Bertone does not think summer rates necessarily reflect the state of the Valley’s economy, but some analysts think they can. Jan Freitag studies the hotel industry for the firm STR. He said around the country, rates are pretty closely tied to gross domestic product. As people feel they can afford to stay in hotels, rates go up.

"For Phoenix, I think it’s fair to assume that as you see room rates grow, that means hoteliers, they feel a little bit stronger about people liking their hotels, even in the summer and feeling a little bit better about their own ability to price higher," Freitag said. "So yeah, I think it’s an indicator of an economy that’s slowly recovering."

Numbers compiled by STR show rates at Phoenix hotels have been fairly stable over the past several Julys and are expected to increase by almost 1 percent during the third quarter of this year.

Kristen Jarnagin with the Arizona Lodging and Tourism Association said when times are tougher, some rates will be lower. She remembers a few years ago, when some rooms went for $50 a night. So, she said the fact that summer rates are starting to climb is a good sign for the state’s economy.

"It’s picking up, yes, but very slowly, and so you still have to attract that value visitor in the summertime," Jarnagin said.

And, that word, value, seems to be key. Jarnagin said when marketing to cold-weather destinations, resorts play up luxury. But, she says in-staters see a different ad campaign.

"When we’re marketing to Arizonans, we’re marketing the value. What are you gonna get for your money? Because Arizonans are not gonna come here and spend $500 a night to stay here, and they’re not gonna spend $300 to golf at the golf courses," Jarnagin said.

Back at the Phoenician, Denise Seomin agrees. She said summer can be a chance for Valley residents to stay somewhere they may not be able to during the peak season.

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