Phoenix Hotel Industry Drives $1.1 Billion in Tax Revenue, Fuels Local Economy :: Hospitality Trends

According to a report by Oxford Economics, Phoenix hotels generate $7.2 billion in economic activity annually, support over 42,000 jobs, and contribute $1.1 billion in tax revenue at the federal, state, and local levels.

A report commissioned by the American Hotel & Lodging Association and conducted by Oxford Economics found that the hotel industry in Phoenix is a significant contributor to the local economy. The report states that hotel operations and visitor spending in Phoenix generate $7.2 billion in economic activity each year. This activity supports a total of 42,237 direct and indirect jobs across the region.

Employment and Wages

The report states that the hotel sector directly employs 9,776 people in Phoenix and pays $627.9 million in annual wages. In addition to direct employment, the industry supports jobs in related sectors, including restaurants, retail, and arts and entertainment, reflecting the broader impact of visitor spending on the local economy.

Tax Revenue Contributions

Phoenix hotels contribute a combined total of $1.1 billion in tax revenue annually. This includes $538.7 million in federal tax revenue, $260.3 million in state tax revenue, and $257.2 million in local tax revenue. Taxes generated from hotel operations and guest visits are used to fund public services, including schools, infrastructure, and emergency services.

Visitor Spending and Hotel Operations

Hotel guests in Phoenix spend more than $4 billion annually, with an average of $641 spent per room night. The city is home to 25,164 hotel guest rooms, and nearly 6.5 million hotel room nights are sold each year across 168 hotel properties. The report also notes that the hotel industry’s presence supports small businesses and local employment beyond the hotels themselves.

Industry Support for Local Businesses

Visitor spending in Phoenix extends to various sectors, supporting local restaurants, retail shops, and entertainment venues. The report highlights that the economic activity generated by hotels has a ripple effect, benefiting a wide range of industries and contributing to the region’s overall economic health.

Future Development

Findings indicate that the hotel industry in Phoenix continues to invest in future growth, with 2,312 hotel rooms currently in development. This planned expansion is expected to further increase the industry’s economic impact and support additional jobs and tax revenue in the coming years.

Key Findings

– $7.2 billion in annual economic activity generated by Phoenix hotels

– 9,776 direct hotel jobs and $627.9 million in annual wages

– 42,237 direct and indirect jobs supported

– $538.7 million in annual federal tax revenue

– $260.3 million in annual state tax revenue

– $257.2 million in annual local tax revenue

– 25,164 hotel guest rooms and nearly 6.5 million annual hotel room nights sold – 2,312 hotel rooms in development

Conclusion

The Oxford Economics report demonstrates the significant economic role of the hotel industry in Phoenix. Hotels not only provide employment and wages but also generate substantial tax revenue and support a range of local businesses. The continued development of hotel properties is expected to sustain and potentially increase this economic contribution in the future.