July 9, 2004 - Visitors continue to flock to Arizona, but not in the record numbers the tourism industry saw before the Sept. 11, 2001, terrorist attacks.

That was the message coming out of the 2004 Arizona Governor's Conference on Tourism being held this week at the Westin La Paloma Resort and Spa, 3800 E. Sunrise Drive.

"With success comes greater expectations," said Margie Emmermann, director of the Arizona Office of Tourism. "But the external threats to the industry have not gone away." A still volatile economy, a devastating 2003 wildfire season and international unrest continued to make for a mixed bag of news for the industry.

The good news: Arizona welcomed 27.8 million domestic overnight visitors in 2003, up 3.6 percent from the previous year. These visitors spent a record $12.14 billion on accommodations, restaurants and attractions, according to the Arizona Office of Tourism.

The bad news: While the leisure visitor segment increased 8.8 percent, travel for business purposes dropped 11.3 percent. "Business travel is where Arizona really fell short," Emmermann said.

More important, direct spending from business travelers was down 10.4 percent from the previous year. Nevada, on the other hand, saw a 29.2 percent gain in business visitors' spending.

Competing for travel spending has become more difficult with the introduction of third-party Web sites, like Travelocity and Expedia.

"The Internet is not only affecting leisure travel, but business travel as well," said Debbie Johnson, executive director of the Arizona Hotel and Lodging Association. "Even business people don't want to feel like they are spending too much." More travelers are shopping for vacations online, if not booking their whole trip through the Internet.

"Travel has become commoditized," said Rudy Maxa, host of "The Savvy Traveler" on National Public Radio's "Marketplace" and the conference keynote speaker. "Eventually the market realizes the true value of everything." But "Arizona stands to gain more than other states because of a strong emotional connection with travelers," Maxa said.

To help the state compete for tourist dollars, the Office of Tourism will receive $11.6 million for fiscal 2005 -- an almost 30 percent increase over this year. "The vision of the Office of Tourism is that Arizona will become a world-class travel destination," Emmermann said.

The Arizona Office of Tourism will use the additional $2.6 million allotted by the state to seek international travelers, another area where Arizona is lagging behind the rest of the nation, Emmermann said.

Particularly, the agency is reaching out to potential visitors from Canada, Germany, Japan, the United Kingdom and Mexico -- where most international visitors to Arizona originate from.

This push includes an IMAX presentation in Britain of "Grand Canyon IMAX Movie Discovery & Adventure," which is currently shown at the Grand Canyon IMAX Theater in the National Geographic Visitor Center.

"We have to reclaim the Grand Canyon," she said. "Las Vegas has done such an outstanding job of marketing the Grand Canyon, many people think it is actually in Nevada." The Office of Tourism will also continue to reach out to "suffering cities" such as Minneapolis, Chicago, St. Louis, Portland and Denver, where residents might be longing for warmer climates, Emmermann said.

In addition to advertising with television and print media, Arizona tourism will be featured on thermal coffee wraps in these cities.

The additional funds will also enable Arizona to be the first Western state to provide tourism information through the 511 traffic information system.

"We have no little plans," Emmermann said. "We are putting Arizona on the cutting edge."

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