Phoenix Hotel Industry Generates $1.1 Billion in Tax Revenue, Strengthening Local Economy

The hotel industry in Phoenix generates $1.1 billion in annual tax revenue, highlighting the sector’s significant contribution to the regional economy.

According to a report by Oxford Economics, commissioned by the American Hotel & Lodging Association, hotel operations and visitor spending in Phoenix generate approximately $7.2 billion in economic activity each year.

Hotel Industry Supports Jobs and Wages

The report shows that the hospitality sector supports over 42,000 direct and indirect jobs in the Phoenix region. Hotels themselves employ 9,776 people directly, paying around $627.9 million in annual wages.

In addition to hotel staff, visitor spending also supports employment in related sectors such as restaurants, retail stores, and entertainment venues.

Strong Contribution to Public Revenue

Phoenix hotels contribute significant tax revenue across different levels of government:

• $538.7 million in federal taxes

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• $260.3 million in state taxes

• $257.2 million in local taxes

These funds help support public services such as infrastructure, schools, and emergency services across the region. 

Visitor Spending Drives Local Business

The study highlights that hotel guests spend more than $4 billion annually in Phoenix. On average, visitors spend $641 per room night, benefiting local restaurants, shops, and tourism-related businesses.

The city currently has 168 hotel properties with around 25,164 guest rooms, and nearly 6.5 million hotel room nights are sold each year. 

Continued Hotel Development in Phoenix

The report also notes ongoing investment in the Phoenix hospitality sector. Around 2,312 hotel rooms are currently under development, indicating continued confidence in the region’s tourism and hospitality market.

Industry experts say the continued growth of the hotel sector will further strengthen the economic impact of tourism and business travel in Phoenix.