Rim Economy Booms In May

Signs point to sharp rise in visitors, sales and occupancy

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Tantalizing signs point to a suspiciously sharp recovery in the Rim Country’s tourist-centered economy.

Payson sales tax figures soared 52 percent in the May report, which is based on sales in April.

In the meantime, the Rim Country Regional Chamber of Commerce in May reported a 28-percent jump in visitation over the previous May.

Moreover, Tonto Natural Bridge State Park reported a big jump in visitors, rising 24 percent from two years ago and even more when compared to last year when frequent closures drove the tally down sharply.

Finally, occupancy rates in Gila County hotels jumped to 58 percent in April, compared to 48 percent a year ago. For the year, occupancy rates in 2010 rose to just 50 percent, compared to 48 percent in the same period in 2000.

All told, the region’s economy in April and May appeared to have logged its best performance in a year — perhaps the first sign economic growth has resumed after a long, cheerless “recovery,” — that generated neither sales nor jobs.

“That’s phenomenal,” said Rim Country Regional Chamber of Commerce Manager John Stanton. “Everybody’s been hanging on by their fingernails, but even the real estate folks are telling me that it’s bouncing back.”

Payson Mayor Kenny Evans greeted the town’s latest tax figures with cautious optimism. The May report details a largely unexplained 52-percent rise from last year in local sales tax, which follows an equally surprising 29-percent decrease in the April report.

Evans said he suspects the state’s problems in collecting and then paying out the local sales taxes may have exaggerated the dramatic shifts in sales tax collections.

“I’m comfortable in concluding that we’re recovering,” said Evans, “but I’m not comfortable with the magnitude we saw in the report. So last month we were getting a hard number that seemed disastrous, but it didn’t make sense compared to what we were experiencing in the community. Some of it may have to do with technical glitches.”

Still, the occupancy, sales tax and chamber figures all told essentially the same story — a strong late spring leading into the crucial summer travel season after a year of languishing in the economic doldrums.

For instance, Gila County hotel and motel occupancy rates rose a brisk 21 percent in April when compared to last year, according to the figures compiled by the Arizona Department of Tourism.

Room demand rose from about 17,000 room nights to about 21,000 room nights. The supply of rooms remained essentially unchanged — about 35,000 room nights.

The Department of Tourism reports figures countywide, so the numbers don’t separate northern Gila County from southern Gila County.

Payson officials have been meeting with hotel owners in an attempt to begin compiling figures that would allow them to focus on Rim Country hotels in hopes of measuring the impact of the town’s promotional efforts and various special events.

For the year, occupancy rates in Gila County remain comparable to other rural counties throughout the state, but well below occupancy rates in the big, powerhouse tourism counties.

The year-to-date occupancy rates totaled 67 percent in Maricopa County, 63 percent in Pima County and 57 percent in Pinal County. Coconino County’s 50-percent occupancy rate put it on the same footing as Gila County — although that Flagstaff-centered county has nearly 10 times as many rooms.

Stanton said before May’s 28-percent increase at the visitors center, there had been a 20-percent decline in the numbers. But as soon as the weather shifted and the Valley heated, the visitors center reported a happy surge of interest. Compared to last year, the number of international and out of state visitors doubled in May.

“Our weather was horrible for the first three months of the year,” said Stanton. “But all of a sudden, it kicked up into high gear.”

Does it signal the recovery at long last? “I want to believe it,” said Stanton, ruefully.

Down at town hall, officials heaved a big sigh of relief when they received the May numbers — since the April report raised the nightmarish specter of a collapse at the end of a tough fiscal year. The town eked through the year by borrowing money from the water department and furloughing town workers two days a month.

The local sales taxes provide the single largest source of town revenue. The May figures totaled $493,000, a full $170,000 above last year’s collections.

That’s the first time since last October that monthly sales have improved on last year — and that was just barely an improvement.

Despite the heartening May figures, local sales tax collections for the fiscal year that started last July came in $485,000 less than the previous year — a roughly 14-percent decline.

Other revenues remained more stable.

For instance, state shared sales tax in the May report collected statewide and distributed based on population hit $97,000, just barely less than last year.

Money from building permits declined slightly in the May report — about 13 percent. The piddling $5,871 collected compares to $46,000 in July of 2008, when the housing bubble collapsed.

The May figures show little sign of a recovery in construction, once one of the region’s economic mainstays.

The vehicle license tax money also hit a cautionary note, declining from $78,000 last May to $33,647 this May. Local vehicle sales have been holding more or less steady since last August, jumped up sharply in March then plunged in May.

Town spending has remained well below the budget originally adopted last July as well, thanks to several mid-year reductions and furloughs.

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