Council denies Chamber of Commerce request for contingency marketing funds8 min read

Sedona Chamber of Commerce and Tourism Bureau President and CEO Michelle Conway speaks at the joint meeting of the chamber and the Sedona City Council on Wednesday, Jan. 11. Photo by Daulton Venglar/Larson Newspapers.

At its Jan. 24 meeting, the Sedona City Council turned down the Sedona Chamber of Commerce’s request that the city release $225,000 of its marketing contingency funds in order to enable the chamber to resume a targeted destination marketing effort.

‘Dire Situation’

Chamber President and CEO Michelle Conway attempted to inspire a sense of urgency in the council.

“It is time to support the business community again,” Conway said. “We haven’t marketed for two years, and it’s starting to really show … It is our strong recommendation that we resume destination marketing.”

“There’s a lot of competition out there for the leisure traveler,” Conway continued, pointing out that a strong dollar is encouraging affluent U.S. travelers to go abroad and that 79% of those who are concerned about the oncoming recession have indicated they will be reducing their travel spending.

Conway added that hotel occupancy in Sedona is now lower than at any time back through 2019, with hotels beginning to drop their rates to compensate.

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“Several galleries are stating that they are in the area of being 30% down,” she told the council.

Members of the Sedona business community turned out to support the case for resuming marketing. “I’ve never had more tenants ask me, ‘Can I be late this month?’ with their rent, or, ‘Can you hold my check?’” said Jesse Alexander, COO of Canyon Portal and Sinagua Plaza.

He added that with revenues down, local businesses may be reconsidering whether they can afford to donate to community organizations as well.

“Businesses in Uptown right now are struggling. In fact, I’d like to know who’s not struggling,” said Jennifer Rivera, of Body Bliss in Uptown. “We need you guys to help get the people here, and we will do our job to sell.”

“We need a unique marketing plan, and it’s not the same old fluff we’ve been doing,” agreed Nena Barlow, of Barlow Adventures, a Jeep tour company. “Fluffy is not getting us anywhere. It’s driving away the quality customers.”

“Eighteen months ago I said this was going to happen,” former Vice Mayor John Martinez proclaimed. “‘We’re going to miss our target in revenue.’” He called Sedona’s situation “a competition now with the rest of the world and the rest of the United States. I see ads on TV promoting Mississippi.”

Former Vice Mayor John Bradshaw suggested that the downturn “almost 100% revolves around employees,” with his own business down 20% to 25% in 2021 because of a lack of employees.

“I don’t know if this advertising campaign will make a difference,” Chamber Board member Al Comello said. “I don’t really care. I just want to know that we are doing something for the economy of Sedona and making a statement.”

The Great Indoors

To preempt expressions of fear at the prospect of Sedona being overrun by careless tourists, Conway proposed a digital media-heavy campaign “featuring the ‘Great Indoors’” that would highlight art buying, culture, shopping, restaurants and other indoor activities. The goal would be to show travelers that Sedona has more to offer than scenery and hiking.

“Sedona needs to attract the right visitors,” Conway said. “Bringing fewer visitors here is better.”

To that end, she argued for defining Sedona as a high-end destination capable of “strategically inviting the appropriate traveler.” The appropriate traveler should be older, have an annual income of $150,000 or more, be interested in indoor activities and willing to stay in Sedona for three or four nights.

“Many of them have the same values as our residents do,” Conway said.

Mark Naparstek, of OH Partners, the firm that the chamber engaged to consult on the proposed campaign, said that the theme of the campaign would be “Meet Sedona Again.”

“It’s really a reminder campaign for everybody that it’s not just about the outside,” Naparstek said. He stressed the need to use social media influencers to tell the story of Sedona’s restaurants, boutiques and amenities. “We want to give them almost a script to tell the Sedona inside story.”

His colleague Kim Bender described the campaign as “selectively targeting a niche audience, a more affluent audience” using digital methods, particularly Facebook and Instagram, which she stated were the social media platforms most likely to be used by older, wealthy travelers. Phoenix and southern California residents in particular would be targeted.

Bender also pointed out that Sedona is being far outspent in marketing by rival destinations such as Vail, Colo., and Santa Barbara, Calif.

‘Businesses Suffer’

The arguments made by Conway and the Sedona business community appeared to fail to convince the council that any additional marketing was necessary or desirable.

Councilman Brian Fultz observed that sales and bed taxes are at “substantially higher levels” than they were prior to the COVID-19 pandemic.

“I’m struggling with the justification that we are in need,” Fultz said. “I’m not seeing a compelling reason why we have to do something right now … We can’t market to the point of trying to save every struggling business.”

Fultz also expressed concern about the campaign’s predicted one-to-one return on advertising spending. “We might as well just hand out the $225,000 to all the businesses in town, because that’s literally a better outcome for them,” he argued.

“Why are we targeting people in the Phoenix metro area? I don’t get it,” Vice Mayor Holli Ploog asked, expressing the view that most Phoenix travelers have probably already been to Sedona.

“You used the words ‘dire situation’ a few minutes ago,” Ploog continued. “There’s a lot of people doing extremely well … certainly our tax revenues don’t show a dire situation …We have to be able to justify to our residents why we’re going back into the market to bring more tourists when they’re happy with the situation now.”

According to the city’s updated revenue predictions, the city’s sales and bed tax collections for fiscal year 2023 will likely be in the neighborhood of $41 million, compared to $23 million in fiscal year 2019 [$27 million when adjusted for inflation].

These collections, however, have already fallen by as much as 12% in some areas from their peak in 2022, “the new normal.” For fiscal years 2024 and 2025, sales and bed tax revenues are now expected to fall to approximately $38.8 million.

The city has offered no assurance that revenues will not return to 2019 levels in the future, given that the city’s 2019 sales and bed tax revenues were the highest in its history prior to the COVID-19 pandemic rush in 2020 and 2021.

“I see Phoenix, as, again, a daytripper or an overnight-tripper,” Councilwoman Kathy Kinsella commented. As for the campaign itself, “it concerns me that it’s a departure from previous messaging, which did speak to behavior … it just sort of targets getting more people here.”

Kinsella objected to what she felt was an implication that not supporting the funding request meant the council didn’t support local businesses.

“We do support business,” Kinsella said, arguing that the city can best support businesses by supporting workers, as it has done through its down payment assistance program.

According to city housing manager Shannon Boone, two people have so far taken advantage of Sedona’s down payment assistance program, one of whom was a city employee.

“In some regards, what we’re getting are more people, not necessarily different people,” Councilwoman Melissa Dunn said of the proposal to target Phoenix-based tourists. “I agree with my esteemed colleagues. It feels like we’re just going to get more day-trippers.”

“From the day I got here, 20 years ago, the art galleries have said they’re in dire straits,” Councilwoman Jessica Williamson said.

“I have a real problem with us not continuing to define what it is that we want to happen here in our city,” Councilman Pete Furman said. “From my perspective, we’ve given you a lot of rope to hang yourselves on … if this doesn’t work it’s going be trouble going forward.”

“I just don’t want to over-promote things that we really don’t have as much here,” Mayor Scott Jablow said. He suggested a focus on promoting restaurants and galleries rather than trying to attract visitors to a small Sedona performing arts scene, characterizing Sedona’s food as “darn good.”

“We need to take our branding back. I’m tired of Polaris branding Sedona,” Jablow added. “I agree that we need to do marketing. This is a time to do marketing.”

Williamson then took a decidedly frank approach with the chamber and the public.

“I’ll tell you what we want,” Williamson told Conway. “What we really want is the number of people coming to Sedona to be cut way, way, way, way down. And then maybe we want these rich people who are coming from wherever they’re coming to come. But that’s not reality … those other people are going to come.”

“The business community, for right or wrong, better or worse, are the dog owners who want grass in the dog park,” Williamson continued. “They want what they want, and it’s important to them even if it makes no sense … The argument could be made that people are suffering. Businesses suffer.”

“If people would just say, ‘I don’t want to do any marketing,’ we don’t have to drag this out any longer,” Williamson concluded.

“We would prefer that … to respect all of our time,” Conway agreed.

The council then voted 4-3 to reject the funding request, with Jablow, Furman and Williamson voting in favor.

Tim Perry

Tim Perry grew up in Colorado and Montana and studied history at the University of North Dakota and the University of Hawaii before finding his way to Sedona. He is the author of eight novels and two nonfiction books in genres including science fiction, alternate history, contemporary fantasy, and biography. An avid hiker and traveler, he has lived on a sailboat in Florida, flown airplanes in the Rocky Mountains, and competed in showjumping and three-day eventing. He is currently at work on a new book exploring the relationships between human biochemistry and the evolution of cultural traits.

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Tim Perry grew up in Colorado and Montana and studied history at the University of North Dakota and the University of Hawaii before finding his way to Sedona. He is the author of eight novels and two nonfiction books in genres including science fiction, alternate history, contemporary fantasy, and biography. An avid hiker and traveler, he has lived on a sailboat in Florida, flown airplanes in the Rocky Mountains, and competed in showjumping and three-day eventing. He is currently at work on a new book exploring the relationships between human biochemistry and the evolution of cultural traits.