Aug. 1--Arizona's tourism industry logged healthy gains in 2000 despite East Valley hoteliers' complaints about too many empty rooms, according to a report released Tuesday by the Arizona Office of Tourism. 

Despite the numbers, state officials say it's apparent business tailed off at the end of last year and that slow trend has continued in 2001. 

A whopping 26.7 million people spent $12.3 billion traveling to and through the state in 2000. That's 5.3 percent more visitors than came in 1999, leaving 8 percent more money behind. Most -- 79 percent -- were vacationers rather than business travelers. The expectations for this year aren't as optimistic, said Mark McDermott, executive director of the state tourism agency. He predicts Arizona tourism will increase 1 to 2 percent in 2001. But that's still on the plus side. Arizona should fare better than the rest of the country because of its heavily weighted leisure travel segment, a big advantage since corporations started to slash business travel when the overall economy soured in late 2000, McDermott said. 

The apparent discrepancy between the state's positive picture for 2000 and the hoteliers' complaints is because a rash of hotel building in recent years left more rooms to fill, said Rich Wetzel, Scottsdale's tourism development coordinator. Even though there were more visitors spending more money, more hotels had to share them, leaving several inns with declining occupancy rates -- the percentage of available rooms actually booked. The over-building finally ground to a halt last year, but then the economy started its downturn. 

While the annual tourism figures look OK, the downward travel trend worries hotels, Wetzel said. 

McDermott said that in early 2000 tourism was growing at a vibrant 18 percent, but a steep fall-off late in the year has continued to gain momentum for the first half of this year. 

"When you look at monthly figures, the last third of the year showed deterioration," Wetzel said of Scottsdale's report for the fiscal year that ended June 30. "We just went through a very soft quarter." The good news is that the airlines are finally jumping into the fray with big bargains on airfares and travel packages, Wetzel said. 

"They are offering tremendous sales in the fall, and that should be good for us and help us recover," he said. 

McDermott said its a temporary solvent and unsustainable for the long run. He said the tourism industry won't bounce back until the whole economy gets on track. 

"It helps to put heads in beds, but it doesn't do much for the airlines' profitability," he said. "If we get through this year with 1 to 2 percent growth, we'll measure up well to the national picture. And then hopefully the economy will make its comeback -- if not in 2002, then maybe in 2003 

"Things just got way out of hand, and we're still reeling form the house of cards built by the tech industry and the dot-coms," he said. "This had to happen, but once the dust settles, we should start to see slow, steady growth." 

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(c) 2001, The Tribune, Mesa, Ariz. Distributed by Knight Ridder/Tribune Business News.