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After immigration law, Phoenix gets quieter
Hospitality business in Arizona feels effects from nationwide boycott
GOODYEAR, Ariz. (MarketWatch) -- Bartenders are scurrying around, the tequila is flowing and the customers are boisterous at Macayo's Mexican Kitchen in suburban Phoenix.
The place is nearly full -- not bad for a Wednesday night -- except there's one problem. It's Cinco de Mayo, and casual customers still can stroll in and find a seat at the bar. Normally, there would be a line out the door, patrons say.
The crowd is jovial as they root for "Los Suns," a moniker adopted by pro basketball's Phoenix Suns in protest of the state's controversial new law to clamp down on illegal immigration. But many locals say there's not a lot to be proud of on this annual celebration of Mexican pride. Some say they're embarrassed by attention the new law has drawn. Others contend it has fostered divisiveness.
"I honestly think the only thing that's holding this town together is that basketball team," said Daniel Fairbanks, a Phoenix resident.
Boycott's bad timing for hotelsBoycotts launched in response to Arizona's controversial new immigration law are hurting business in the state's hospitality industry. MarketWatch's Russ Britt reports from Phoenix.
After struggling through a difficult recession, the state's $18.5 billion hospitality industry and its 200,000 tourism employees face potential new headwinds as boycotts of Arizona are organized by critics of the new law.
Hitting tourism
It's already having an effect on tourism, officials say, and it could get worse as time goes on. Within two weeks of the immigration bill's passage, 23 large groups of conventioneers had canceled plans to come to Phoenix, costing the city as much as $10 million in business, says Kristen Jarnagin, spokeswoman for the Arizona Hotel and Lodging Association.
Reports are coming in daily of yet another group backing out of an upcoming convention, but Jarnagin says some boycott-related cancellations may not be reported as such.
"We'll never know the true impact," she said.
It's not just the short-term business that could be affected, Jarnagin adds. Groups normally would be booking conventions now for events that are years away.
"We do feel there is a fair amount of lost business from people who are in the stage of booking meetings," Jarnagin said. "There is a long-term potential impact there. I don't know that we'll ever be able to calculate it."
At the Phoenix Convention Center, the nation's oldest African-American fraternity, Alpha Phi Alpha, has scrubbed plans for a July event involving 5,000 conventioneers. At least 19 other groups may follow suit, resulting in a loss of $90 million in revenue, according to local published reports.
"We've had several inquiries from attendees who are concerned about the immigration law," said Cynthia Weaver, spokeswoman for the convention center. She's mainly fielding questions about security, but added that some groups are concerned about tolerance.
"Some of their members may or may not be U.S. citizens," she said.
The center's advance bookings stretch out as far as 2019, Weaver says, and so it also may be missing out on future business. How much is unclear, but the center hosted 69 events with roughly 300,000 people in attendance last year.
That may not be an accurate gauge either. The convention center was tripled in size to 900,000 square feet during an expansion project that concluded in late 2008. The project was finished right as the recession kicked into full gear and so it's unclear yet what a normal year is for the center.
Generally ineffective
Boycotts usually don't help reshape consumer behavior, said Brayden King, assistant professor for management and organizations at Northwestern University's Kellogg School of Management. In the Arizona case, however, large organizations are cutting ties with the state.
"They're [the large groups] making that decision for the consumer," King said. "That means the boycott could have a much bigger effect than it normally would."
If Arizona politicians perceive a threat to the state's image, they might give in to boycotters and soften or repeal the law, King says. It happened before when the state was a longtime holdout on declaring a Martin Luther King holiday in the 1980s. Arizona eventually adopted the holiday after boycotts resulted in Super Bowl XXVII being moved from suburban Tempe to Pasadena, Calif.
"State lawmakers don't like to look like bad guys," King said.
It's unclear how much of an impact the boycott is having so far. The Arizona Office of Tourism, an agency under the governor's office, declined to comment.
Hospitality business in Arizona feels effects from nationwide boycott
GOODYEAR, Ariz. (MarketWatch) -- Bartenders are scurrying around, the tequila is flowing and the customers are boisterous at Macayo's Mexican Kitchen in suburban Phoenix.
The place is nearly full -- not bad for a Wednesday night -- except there's one problem. It's Cinco de Mayo, and casual customers still can stroll in and find a seat at the bar. Normally, there would be a line out the door, patrons say.
The crowd is jovial as they root for "Los Suns," a moniker adopted by pro basketball's Phoenix Suns in protest of the state's controversial new law to clamp down on illegal immigration. But many locals say there's not a lot to be proud of on this annual celebration of Mexican pride. Some say they're embarrassed by attention the new law has drawn. Others contend it has fostered divisiveness.
"I honestly think the only thing that's holding this town together is that basketball team," said Daniel Fairbanks, a Phoenix resident.
Boycott's bad timing for hotelsBoycotts launched in response to Arizona's controversial new immigration law are hurting business in the state's hospitality industry. MarketWatch's Russ Britt reports from Phoenix.
After struggling through a difficult recession, the state's $18.5 billion hospitality industry and its 200,000 tourism employees face potential new headwinds as boycotts of Arizona are organized by critics of the new law.
Hitting tourism
It's already having an effect on tourism, officials say, and it could get worse as time goes on. Within two weeks of the immigration bill's passage, 23 large groups of conventioneers had canceled plans to come to Phoenix, costing the city as much as $10 million in business, says Kristen Jarnagin, spokeswoman for the Arizona Hotel and Lodging Association.
Reports are coming in daily of yet another group backing out of an upcoming convention, but Jarnagin says some boycott-related cancellations may not be reported as such.
"We'll never know the true impact," she said.
It's not just the short-term business that could be affected, Jarnagin adds. Groups normally would be booking conventions now for events that are years away.
"We do feel there is a fair amount of lost business from people who are in the stage of booking meetings," Jarnagin said. "There is a long-term potential impact there. I don't know that we'll ever be able to calculate it."
At the Phoenix Convention Center, the nation's oldest African-American fraternity, Alpha Phi Alpha, has scrubbed plans for a July event involving 5,000 conventioneers. At least 19 other groups may follow suit, resulting in a loss of $90 million in revenue, according to local published reports.
"We've had several inquiries from attendees who are concerned about the immigration law," said Cynthia Weaver, spokeswoman for the convention center. She's mainly fielding questions about security, but added that some groups are concerned about tolerance.
"Some of their members may or may not be U.S. citizens," she said.
The center's advance bookings stretch out as far as 2019, Weaver says, and so it also may be missing out on future business. How much is unclear, but the center hosted 69 events with roughly 300,000 people in attendance last year.
That may not be an accurate gauge either. The convention center was tripled in size to 900,000 square feet during an expansion project that concluded in late 2008. The project was finished right as the recession kicked into full gear and so it's unclear yet what a normal year is for the center.
Generally ineffective
Boycotts usually don't help reshape consumer behavior, said Brayden King, assistant professor for management and organizations at Northwestern University's Kellogg School of Management. In the Arizona case, however, large organizations are cutting ties with the state.
"They're [the large groups] making that decision for the consumer," King said. "That means the boycott could have a much bigger effect than it normally would."
If Arizona politicians perceive a threat to the state's image, they might give in to boycotters and soften or repeal the law, King says. It happened before when the state was a longtime holdout on declaring a Martin Luther King holiday in the 1980s. Arizona eventually adopted the holiday after boycotts resulted in Super Bowl XXVII being moved from suburban Tempe to Pasadena, Calif.
"State lawmakers don't like to look like bad guys," King said.
It's unclear how much of an impact the boycott is having so far. The Arizona Office of Tourism, an agency under the governor's office, declined to comment.