There are lessons to be learned through Scottsdale’s economic hit

There are lessons to be learned through Scottsdale’s economic hit

If the current public health crisis has taught us anything it has reminded us how tourist-dependent our local economy has become.

The crisis and the government’s public safety response could not have come at a worse time. This hit to our economy would be devastating in any month of the year, but March? The timing could not have been worse.

One silver lining to this crisis is that we were able to get large events such as Barrett-Jackson, The Waste Management Open and the Arabian Horse show completed before the crisis hit Arizona. Spring Training will bear the brunt of the disruption.

Economic diversification is a sign of stability. If any market becomes dependent on a particular sector than that market is more susceptible to recession. Tourism is somewhat resilient in that it can recover quickly from an economic downturn. However, the tourism industry can be vulnerable to economic, social and political changes. And in this case, changes in public health.

Scottsdale’s economy has been decimated in two short weeks. Bars and restaurants shuttering, winter visitors scattering back to their summer homes means loss of incomes and jobs to our service sector workforce.

It is much too soon for any sort of economic impact numbers to be derived from this crisis. We have no data on duration or impact. However, in a March 16 report prepared by Inter-American Development Bank titled Covid-19: Tourism-Based Shock Scenarios for Caribbean Countries. The report forecasts GDP disruptions to the Caribbean tourism sectors.

The long-term projections are without precedent. While Scottsdale is not as tourism-dependent as many Caribbean Islands the projections are still alarming.

Scottsdale’s Tourism economy might be closely aligned with numbers from Las Vegas where according to an analysis by the Las Vegas Convention and Visitors Authority, Southern Nevada’s Tourism GDP contribution is 20%.

According to Experience Scottsdale’s Visitor Tourism Study, published in November 2019 percentage of tax revenue attributed to visitors is 26%.

The numbers are clear. Scottsdale needs to wean itself from being so dependent on tourism.

Scottsdale needs higher-paying jobs that are sustainable. Jobs in the technology and health sectors. We need more engineers, developers and STEM-based jobs.

Scottsdale’s Economic Development staff does an outstanding job of promoting Scottsdale as a business-friendly community. We need to continue to allocate resources to further encourage economic diversification.

Our community will survive those unprecedented and frightening times. When we emerge from this crisis, I hope we can take some of these lessons and implement them as public policy.