Tourism is not a dirty word.

That was the feelings of Linda Goldenstein, chairwoman of Sedona Chamber of Commerce board of directors, during its annual report to the Sedona City Council on Tuesday, June 14. Council also unanimously approved a contract for destination marketing and tourism promotion services with the chamber for fiscal year 2017.

The budget submitted by the chamber for the upcoming fiscal year, which starts Friday, July 1, is just under $2.01 million. This includes 55 percent of the projected bed tax collections for fiscal year 2017, which is $1.73 million. Plus, there is an additional $274,909 from the anticipated fiscal year 2015-16 collections that will be paid this year.

A city report states that according to the contract terms, 55 percent of any bed tax collections that exceed the projected budget will be paid to the chamber as a “true up” at the end of the fiscal year. Because the city estimates that will be an additional $274,909 for the current fiscal year, the chamber has also included that amount in its budget.

Chamber President and CEO Jennifer Wesselhoff started her presentation by saying their mission continues to center on creating and maintaining economic vibrancy through businesses retention and attraction. She said tourism is a $600 million industry in Sedona, generating $10 million in local tax dollars and $200 million in wages. In addition, it makes up nearly 65 percent of the city’s general fund.

Through the first eight months of the current fiscal year, the city has collected $1.7 million in hotel bed tax, nearly $250,000 more than the same period last year. Wesselhoff said that last year $2.6 million in bed tax was collected — a jump of 27 percent or more than $550,000 than in 2014.

“That means the last 18 months of our contract, the city collected more than $4 million in bed tax from hotel rooms — and almost $20 million dollars more was spent on rooms in our city compared to the previous year,” she said. “In the last two years of our contract, the city has generated more than $2.3 million in additional sales taxes alone. That extra $2 million went straight into the city’s coffers that can be used for streets, sidewalks, police, parks and transportation solutions.”

According to a Regional Economic Development Center at Yavapai College study, for every dollar invested in the chamber’s efforts, visitors spent $39.65. Of that, $8.19 went to the city via taxes.

“If you don’t want to give us credit for 100 percent of these increases — because generally, the economy is recovering and gas prices are down — then let’s use an estimate that we’re responsible for 20 percent of the increased visitor spending,” Wesselhoff said. “That means that for every dollar invested in our efforts, the city received $1.64 in taxes.”

A question some ask in Sedona — that was echoed later in the meeting by Councilman John Martinez — is, when is enough, enough when it comes to the number of tourists? The chamber estimates that last year there were nearly 2.8 million unique visitors to the area. Wesselhoff said those numbers may increase this year due to the National Park Service promoting its 100th anniversary.

She said the goal of the chamber is quality over quantity when it comes to visitors. Meaning, they want to bring in visitors who are looking to stay several days instead of just day trippers. Right now, the hotel occupancy average is 68 percent year round. She and hoteliers would like to see that closer to 80 percent, with an increase in the traditional slower periods of summer and winter.

Wesselhoff said they plan to “tap the brake pedal” in the areas such as advertising/promotion and internet marketing while “tapping the gas pedal” for areas including group/meeting sales, public relations and product development. And in regard to product development, in which $465,000 has been budgeted, she said any plan must do the following:

• Generate room demand in non-peak periods.
• Speak to both external visitors and internal resident demands.
• Align and reinforce key Sedona brand elements.
• Ensure the ability of the partner to effectively execute.

As he has in the past, Martinez said he would be in favor of putting out a request for proposal in the future to see if there are any other agencies that would be able to handle Sedona’s marketing and product development. He did say he was pleasantly surprised with the success since increasing the bed tax two-and-a-half years ago and that overall he’s pleased with the direction of the chamber.

“I personally think you guys are doing a fantastic job,” he said. “Obviously the numbers and tax dollars that you’re bringing in are extraordinary. But I’m a fan of competition. Would you be willing to compete in the form of an RFP for destination marketing?”

To which Wesselhoff asked, “Are you not happy with the service we’re providing?”

“I just said that you’re doing a great job but I’m also a fan of competition,” he said.

“Then what would be the benefit?” she asked.

“To see if there is something better at the same or lower cost,” he said. “That would be it.”

Wesselhoff said they would welcome the competition.

“I can’t imagine that an agency, let’s say from Scottsdale, is going to love you like we do,” Goldenstein added, while getting applause from the audience.