News Article Accuracy Check

Many new articles/opinion pieces are being published regarding the Chamber and City of Sedona DMO status. Many need additional information to provide balance or improve accuracy. We are reviewing the articles as they are published and commenting. Hopefully you find this information helpful:

Sedona City Council Tourism Work Group 4-26-23: What City “DMO” Status Means For Business and Residents Letter We received this information directly from the City Council Work Group – Brain Fultz, Kathy Kinsella and Holli Ploog. It is great to hear from them!

Arizona Republic 4-26-23: Sedona takes charge of tourism promotion This article is generally accurate. It provides useful information on Cottonwood’s similar action to become their own DMO and contract their Chamber for desired services. We encourage you to read this article.

One clarification: Michelle Conway stated that, data indicates visitation numbers are dipping below pre-pandemic levels. What she is really refering to is traditional lodging numbers, because that is the only “visitation numbers” the Chamber tracks. Traditional lodging has been greatly affected by short-term rentals (Airbnb’s). There are now more “hotel rooms” in our neighborhoods than in the Hotels and tourists are choosing the homes because of lower cost and community. Traditional lodging is suffering, no doubt. 4-24-23 by Guest Columnist Donna Joy: City Doing the Right Thing with Destination Marketing This is a very accurate article. We encourage you to read it.

Red Rock News 4-21-23 opinion by Christopher Fox Graham: “Sedona City Council still doesn’t get why it was dumped by the chamber”

Mr. Graham concludes that the Council was “feeling hurt by the chamber’s actions”. Not sure “hurt” is the best choice of words, but the Council and Chamber were in the middle of a Council commissioned activity to get aligned with the Chamber on tourism goals and guiding principles. Bob Pifke and Ann Kelley had spent a month meeting with Councilors and the Chamber to build that alignment. Their report was going to be presented on April 12th, so why did the Chamber quit before then?

Mr. Graham questions the City hiring a “consultant to tell them what they need to do about tourism” and that the Council will now be “spending taxpayers money on tourism themselves”. He then encourages the Council to “hire the best bidder, which may be the Sedona Chamber”. So hire the organization that just quit? Why does he think the Chamber would even be interested in that?

Mr. Graham questions why the City declared itself as the destination marketing organization although he later answered his own question. “Per the AOT, a DMO is a non-profit or government unit responsible for the tourism promotion and marketing of a destination.” The Chamber just said that they did not want a contract with the City. That contract is required to be the DMO. So, the City had to fill the DMO position before the Chamber contract expired.

Mr. Graham speculates as to what the City will do next. We don’t know the answer, but we have confidence in Karen Osburn, the City Manager to find a great consultant to start this journey.

Skift 4-20-23: “The tourism bureau thought it was time to restart destination marketing. Yet the Sedona City Council wouldn’t budge. It denied requests to jump-start marketing.”

What is left out of this article is why the request for marketing was “denied”. On January 24th, the Chamber brought ad campaign proposal to the Council for consideration. This ad campaign was presented as targeting affluent adults 35+ with grown children and tourism businesses versus nature. But the visuals were a young couple and red rocks. The tourism business visuals were tiny pictures at the bottom of a huge picture of the Sedona scenery. The Chamber proposed to advertise in Phoenix and southern California. The request spend for the campaign was $225k with an Agency Fee of $90-100k (40%), leaving $125k for advertising. One Councilor asked for the estimated return on investment and the Advertising Firm said 1:1 (for every dollar spent, you will get a dollar back). The Councilor concluded that it would be better for the City to just hand the money directly to the tourism businesses versus do the campaign. Based on all of this, most of the Council questioned the effectiveness of the proposed campaign. That is why it was voted down. Here is a link to the presentation. See it for yourself.

Red Rock News 4-19-23: The visitor center will create $5.25 million in sales and a corresponding amount of sales tax revenue for the city

This article questioning Councilor Fultz’s comments on the “value” of having the Visitor Center.  The article presented a Return on Investment based upon visitors coming into the center and asking for recommendations on where to eat or shop.  The article gave “credit” to the Visitor Center for the money generated by that inquiry.  The problem with that basis is that it has to assume that without that dialogue, the visitor would not have eaten or shopped.  That is likely not true.  It is just where they chose to go that was possibly influenced. 4-14-23 Opinion by Steve Segner – Chamber’s job was to support local businesses

This opinion piece states that “The Chamber was the Destination Marketing Organization (DMO). Its job was to promote tourism and support local businesses.  For the last two years, the city council stopped the Chamber from marketing the city and supporting small businesses. The city council would not allow Chamber members to use their funds to support marketing efforts for its members.”

It is important to read this quote carefully – “support marketing efforts for its members”.  This was one of the biggest points of contention between some members of the City Council and the Chamber.  The Chamber got bed-tax money from the city and then utilized it to ONLY support their members.  And based upon our research, only 39% of Sedona tourist businesses are members.  So only 39% of the tourism businesses were listed in tourism literature highlighting tourism businesses. Only 39% of the tourism businesses could put their flyers in the Visitor Center (until very recently after a year of requests from the Council).  So the Chamber was not “supporting local businesses”.  They were only supporting 39%. 4-13-23 Opinion by Tommy Acosta – City Joins Chamber in Promoting Tourism

This opinion piece contends that, “The City of Sedona, which has over the last few years done just about everything it could to stop the Chamber of Commerce and Tourism Bureau from destination marketing, now has to participate in the marketing effort as well.”  And that “council is bound by law to spend a sizable chunk of the millions collected from its bed tax imposition, on the very thing they had tried to stifle over the last few years. And there is nothing they can do about it.”  

Destination marketing do not have to mean encouraging people to come to Sedona (what the Chamber wanted).  The Arizona statute allows the money to be spent in many ways.  The City is committed, unlike the Chamber, to support ALL Sedona tourism businesses.  As the City builds their DMO programs, they will focus on informing tourists that have already arrived in Sedona of all of the great shops, restaurants and services in Sedona.  They are already discussing very innovative ways to achieve this – far beyond a brick and mortar Visitor Center.

Red Rock News 4-10-23: Sedona must repeal the 0.5% bed tax if no plans to spend on marketing

This Opinion piece contends that the City must repeal the 0.5% bed tax because they are not spending it consistent with state statues.  They reference Arizona Revised Statute §9-500.06.C, that states that under the terms of any bed tax imposed after April 1, 1990 — like the 0.5% tax Sedona hoteliers and the City Council agreed to pass in 2013 — the funds shall be used exclusively by the city or town for the “promo­tion of tourism”.  They then summarize the definition of “promotion of tourism” and indicate that the City has no intentions to do any of those activities.  The Statute wording includes expenditures to operate tourism-related facilities to assist in the promotion of tourism.  Prescott and Scottsdale utilize bed tax to fund a downtown trolley, parking garage, additional lighting and tourism related capital improvements.  The equivalent in Sedona is the Trailhead Shuttle and the numerous Sedona in Motion (SIM) improvements to mitigate traffic caused by the influx of visitors.  The best example is the addition of a southbound lane in Uptown that eliminated the extensive backup into the canyon that used to occur.  The 0.5% bed tax is ~$1.3m.  The Trailhead Shuttle operation cost exceeds $2.5 million/year. The additional bed tax is being utilized.