The sales and bed tax numbers from Sedona’s busiest season are in, and the results show that spring break 2023 was financially on par with spring break 2022. Retail sales continued to stagnate and amusements showed consistent declines from February through April, although lodging revenues experienced a surge during March.

February

February 2023 sales tax revenues were $2,490,337, down 4% from 2022’s collections and 8% from 2023 expectations. Bed tax revenues were $748,220, down 2% from last year’s collections and expectations.

Total year-to-date sales tax collections were at $19,550,310, which was $1,022,940, or 5%, less than in February 2022, and total bed tax collections were $5,153,276, which was 6% less than at the same time the previous year.

Construction showed the biggest decline compared to last February at 24%. Amusements were down 15% and retail was down 5%, with other categories holding steady; communications were up 11%. Hotel occupancy was at 63%, between 2021 and 2022 levels, while the average daily room rate jumped to $275 from $225 in January.

March

March 2023 sales tax revenues were $3,190,884, up 2% from 2022 levels but 13% below the 2023 budget’s expectations. Bed tax revenues were $959,154, which were up 15% over last year’s collections but which were still 14% below the 2023 estimates. Total year-to-date sales tax collections stood at $22,741,194, or $954,427 less than they did in March 2022.

Total bed tax collections for the year were $6,112,430, lagging 3% behind last year.

The construction, communications and hotel sectors posted gains of 23%, 21% and 14%, respectively, compared to March 2022. Retail was down 5% and amusements down 11%. At 75%, hotel occupancy was below 2021 and 2022 levels, and ADR climbed to over $350.

April

April 2023 sales tax revenues were $3,473,300, up 6% from last year’s level and 9% below the 2023 budget estimate. Bed tax revenues came to $982,381, which was almost identical to April 2022’s revenues but a full 20% below the city’s 2023 budget projection.

Total year-to-date sales tax collections reached $26,214,494, narrowing the gap with 2022’s revenues to $755,074, or 3%. Bed tax collections for the year so far were $7,094,811, still 3% behind 2022’s numbers.

Construction saw a 63% increase compared to last April and leasing a 20% increase. Restaurant sales were up 8% and retail up 9%; communications and amusements both saw losses of 9%. Hotel occupancy of 80% was comparable to 2022 levels. ADR reached approximately $380, which was higher than it was in April 2021 but considerably less than it was in April 2022.

For the year to date, most individual sales tax categories were slightly down or stagnant, although communications sales tax revenues were up 5% and amusement revenues were down 14%.

Totals

Total sales tax collections in FY 22 were $32,749,006 and total bed tax collections were $8,942,766.

On the basis of the current year’s numbers, estimated collections for FY 23 will be in the neighborhood of $31.5 million and $8.5 million, respectively, down about $1.7 million from last year and about $6.8 million below city staff’s 2023 budget estimates.

The above figures do not take inflation into account. Adjusted for inflation, FY 23 tax collections of $40 million would be worth about $38.97 million in FY 22 dollars, making the real decline in revenues from 2022 to 2023 closer to $2.7 million.

Sedona’s proposed FY 24 budget estimates that the city will collect sales tax revenues of $30.384 million and bed tax revenues of $8.025 million, reflecting city finance director Cherie White’s January prediction of an oncoming recession. If the current 4% rate of inflation continues throughout the next year, $38.4 million in revenues in 2024 dollars will be worth about $34.7 million in 2022 dollars — equal to a real loss of about $6 million, or 17%.