Sedona Tourism Industry Feeling Recession's Pinch

Aug 27, 2009

Flagstaff, AZ – The first rays of sunrise burst over the red cliffs of Sedona, and Holly McGhee, of Carrollton, Georgia is on a hilltop, watching in awe.

"Oh my gosh," McGhee says. "That is unbelievable. Wow."

McGhee is travelling with her husband and her two sisters. They're staying a few days in Sedona before heading off to the Grand Canyon. There, the four of them will share one room for one night. In these lean times they are making do with less.

"Usually we'll do two nice vacations a year, because we figure we need to do it while we can," McGhee says. "But probably this year we won't."

Traveling less and spending less is a common pattern among tourists this year. This means holiday sites across America are feeling the pinch, Sedona among them. With its red rocks, hiking trails, art galleries, high-end resorts and metaphysical mystique, Sedona usually attracts upwards of 2.8 million tourists a year. This year because of the recession, that number is down almost a quarter million. Visitor levels are down eight percent.

For many visitors, the Sedona experience is a ride into the back country in an open Jeep. The biggest company is Pink Jeeps, an iconic Sedona institution for half a century. Owner Shawn Wendell says his business is nosing into a double-digit decline.

"You know 9/11 affected the tour business and also whenever we have a forest fire or forest closure that affects us," Wendell says. "So we have to ride these kind of waves of changes, not just this new economic tsunami that's hit us."

That tsunami is not just in visitor numbers. Retail sales are down almost 17 percent from last year. In a town of only 17,000 residents, almost wholly reliant on a half billion dollar tourist trade, things look bleak.

At Enchantment the top end of Sedona's luxury resorts, tucked away in its own 70-acre red rock canyon room occupancy is down ten to twelve percent. As a result the resort has trimmed the payroll. Manager Annika Jackson says the first to go have been part-time workers.

"The people who are full-time, I mean that's who depends on us for their families, their rent, their food and that's who we take care of," Jackson says.

The majority of Sedona's visitors stay in timeshares, and that industry is in real trouble. ILX Resorts, which owns Sedona's prestigious Los Abrigados hotel and spa, has filed for bankruptcy protection. Others are cutting sales forces and curbing guest services.

The economic downturn has not only hurt resorts and hotels. All across Sedona, businesses and people are tightening their belts as the effects of the recession trickle down into restaurants, bike shops and art studios. In a ceramics studio on the north end of town, Dennis Ott grabs a large clay pot fresh from the wheel.

"Probably 75 pounds worth of clay right here," Ott says. "Bigger's better, heavier's the best."

Ott is a potter and artist-in-residence at the Sedona Art Center, the hub of the arts community.

"There's probably close to 2,000 fulltime artists here, and these are not just hobbyists, these are actually people that depend on their income in their art," says Ott. "So it's really a very creative town."

Creative, but troubled. Public and private funding for the arts is being slashed and many artists are struggling. Peggy Sands teaches a water color class. She moved to Sedona from Italy four years ago and did well for a while. Then late last year the sales and commissions stopped.

"I saw I better switch professions or I'm in trouble," Sands says. "At the turn of the year I did my numbers, I'm doing my taxes, I'm going, I'm not going to make my, I mean forget it. I can't count on anything anymore."

A survey done three years ago found after shopping, art was the most popular interest among tourists. With the decline in visitor numbers, art sales have tumbled and almost a third of the town's seventy galleries have gone out of business.

"Art is your ultimate luxury and people who have money, and I've heard this again and again and again, people who do have the money who would in normal economic times spend it are sitting on it because they don't know what's going to happen," says Sands.

For some it has already happened, and it's crisis time. "I'm here for food," says Lynn Dalton, who's just made a trip to the local food bank. "I don't have groceries at home."

Dalton is a welder who works in home construction. But that industry is also in trouble, not just because of mortgage woes and banking problems, but because home sales in Sedona rely in large part on tourists falling in love with the area and deciding to buy or build. That's not happening.

In a good year Sedona issues permits for 50 or 60 new homes. So far this year, only five have been issued. Dalton hasn't had a paycheck since last spring.

"Construction has slowed down so much that when the big contractors are not getting loans from the bank the money doesn't trickle down to the little people like us," Dalton says.

Overall, the trend in Sedona continues downward. But even with no sign yet of recovery, many here remain hopeful.

"We feel that no matter what people are still going to come up to Sedona," says Shawn Wendell, owner of Pink Jeeps. "Just to get away from their issues, other problems in the world and get that natural outdoor feel, and just really get out there and say you know what? It might be a tough day, but it's going to be okay in the future."

- with reporting by John Paxson