In 2020, the tourist industry was thrown for a loop as occupancy rates fell as out-of-state visitors decreased, and the usual strong economic effect of Arizona’s resorts and attractions experienced a knock unlike any other in recent years. However, with the completion and openings of new hotels, restaurants, and renovations of mixed-use buildings such as
Fashion Square, Scottsdale, one of the state’s most popular hospitality hot spots, continued to attract residents and visitors.
According to the City of Scottsdale’s annual tourism survey, hotels and resorts in the Scottsdale area had a record-breaking 70.7 percent annual occupancy in 2019.
In that year, 11 million people came to the city, generating $3.3 billion in economic effect and $54.7 million in taxes.
The occupancy rate fell to 40.1 percent in 2020. According to STR, occupancy at Scottsdale-area hotels and resorts will be only 49.5 percent in 2021,
but that could alter as the epidemic progresses throughout the year.
“The pandemic came on the heels of one of the strongest years on record for Scottsdale’s tourism industry, and at the start of 2020 we were projected to have another really strong year and see growth at our hotels and resorts in occupancy, rate and revenue,” said Stephanie Pressler, director of Community Affairs for Experience Scottsdale, the city’s tourism bureau.
“Our high season is January through April, so we did really well the first few months of the year. Then COVID hit and in March a lot of our hotels closed for a bit. Since August 2020, we’ve been seeing occupancy levels plateauing around 30 to 40 percent,” Pressler said.
Despite lower occupancy than in previous years, Pressler said Scottsdale resorts, hotels, restaurants, and other businesses
have established enhanced health and safety standards to ensure visitors feel safe and welcome.
“It has been a challenging time, but this is a resilient industry. We are hopeful for the future, and Scottsdale is known for our luxury brand,” she said. “I think the interest in some of these new projects coming to Scottsdale, both the ones that opened in 2020 and ones that will be online in the coming years, speaks to the strength of our tourism industry and our brand.”
DPR Construction, the general contractor for the AC Hotel Scottsdale North, which opened in January 2021, was the first business in Arizona to execute and deliver a prefabricated building for Marriott and the hotel industry, according to Matt Shock, project executive. This could usher in a more efficient construction model for future similar projects.
“It proved that prefabrication and modular construction is a viable option, especially in this market, and this project showcased that compared with other projects,” Shock said.
The 88,000-square-foot, 165-room, six-story boutique hotel in Scottsdale’s heartland is set to open in June 2020.
The project was completed in 13 months, three months faster than the AC Hotel brand’s usual construction timeframe.
Top five stories of the structure were prefabricated, which reduced workers on site and helped keep the project on schedule.
Adoption of Digital Building Components provided a number of benefits, including cost certainty in terms of frame, finish, and quality.
The use of a panelized steel structural system with load-bearing walls increased the building’s lifetime
while also allowing for the construction of a larger structure with more guest rooms and
load-bearing structure was built off-site, which helped to keep the nearby resort as quiet as possible.
The structure has a lobby with high-end finishes, a centered bar, a modern lounge area, a professional co-working space, five levels of luxury guest rooms, and a pool.
“AC Hotel Scottsdale North is a boutique lifestyle hotel,” Shock said. “It caters to the business traveler in an area that is really dominated by full-service resorts. It is ideally located in a great area next to Kierland Commons, and it’s got a ton of adjacency to the existing Westin property at Kierland,” Shock said.
“It was also interesting because the owner, Host Hotels and Resorts, typically only does luxury products, so I think it’s a testament that a number of national hospitality developers are looking at the range of product types they have within their portfolio and are trying to find which one is going to be the right value-add based on the submarket that it’s in.”
Canopy by Hilton Scottsdale Old Town, in addition to AC Hotel Scottsdale North, is set to open in 2020. The seven-story, 204,810-square-foot, 177-room hotel in downtown Scottsdale is set to debut in October 2020.
Mark Beal, director of construction for Ryan Companies, the general contractor of Canopy Scottsdale, said the construction timeline stayed on schedule because COVID protocols with social distancing and safety procedures were implemented. “We were very deliberate about educating our subcontractors and tradespeople onsite about social distancing and did aggressive cleanings by shift. We were fortunate that we were able to maintain our construction momentum.”
Canopy Scottsdale features a trademark restaurant, an American bistro influenced by the Southwest,
as well as Outrider Rooftop Lounge, Old Town’s newest rooftop pool and bar,
which offers views of Camelback Mountain from the hotel’s seventh floor.
The interiors blend striking natural features with handpicked artwork by local artisans, such as a mix of wood and metal tones blended throughout.
The guest rooms combine a midcentury contemporary look with natural simplicity, giving attention to the city’s unique surroundings.
Beal said Canopy Scottsdale was an exciting project for Ryan Companies because of its location in Old Town Scottsdale.
“The hotel sets the bar for top-notch amenities, and its location draws people. The rooftop bar is second to none, so we were really appreciative of our partnership with Miller Global (owner of Canopy) and being selected to bring this new hotel to Old Town Scottsdale.”
Canopy Scottsdale provides tourist accommodations among nearby galleries, cultural venues, entertainment and retail. Situated at the northeast corner of First Street and Marshall Way, the project is immediately east of the Museum of the West and within the Scottsdale Arts District.
Mixed-use areas like Old Town Scottsdale are hubs of activity and attract both residents and visitors to experience hotels, activities and restaurants in close proximity.
“Old Town is really the heart of our community and has so many opportunities. It adds to what we can offer people who want to come here and have experiences and memories,” Pressler said. “Throughout the pandemic, I think people have realized they might have taken travel for granted in the past; and our new campaign, called ‘Extraordinary Moments. Lifelong Memories,’ is focused on highlighting the memories you make when you travel to Scottsdale with all the things you can do here.”
The tourism industry in Scottsdale has a lot of opportunities to recover as the pandemic evolves. “One of the things that will benefit us as a destination as we come out of the pandemic is having so many wide open spaces, hiking opportunities and the beauty of the desert,” Pressler said. “People feel rejuvenated when they come here. They can be outside and can stay at a casita-style resort where there are open-air hallways, so they have distance between themselves and other guests.”
In addition, Pressler said meetings and events could be a first step toward attracting more visitors to the area later this year once people are vaccinated and feel more comfortable traveling again.
“Meetings and conferences are important to Scottsdale’s tourism industry. They help fill our hotels and resorts, but those groups also are filling our restaurants and going to our attractions. Those events probably won’t be coming back online until the third or fourth quarter of 2021.”
Although the tourism industry and Scottsdale hospitality did take a large hit in 2020, there is optimism about how new developments, such as the AC Hotel Scottsdale North and Canopy by Hilton Scottsdale Old Town, add value to Scottsdale’s already dynamic tourism landscape.
“In the past few years before the pandemic, we were seeing growth year after year for our tourism industry; new restaurants and hotels; and renovations at hotels, restaurants and Fashion Square, so there was a lot to be excited about then. 2020 paused that excitement, but we are hopeful that we’ll be able to get back to that, as consumer poll surveys show people are feeling more confident to start to plan trips later in the year,” Pressler said.
“This is a resilient industry. We’ve experienced a lot of strife before and overcome different things in the past, and I think we’ll emerge stronger from this. It will just take time to get there. At Experience Scottsdale, we’re hopeful that the work we do will also help the industry recover as well.”