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Arizona is facing an image problem that’s affecting tourism.

After the state passed a controversial law in April 2010, cracking down on illegal immigration (Arizona SB 1070), thousands of Americans protested in Phoenix, the state capital. Tens of thousands of protestors organized in cities across the country. Governments and officials in cities including San Francisco, Los Angeles, Seattle and Minneapolis boycotted Arizona. They cancelled business travel there and avoided conducting business with companies based there.

“There’s no doubt about it,” Brian Johnson, chairman of the Arizona Hotel and Lodging Association said in a local news interview. “It hurt our image.”

Within just one month of the bill’s passing, 23 hotel bookings for meetings and conventions were cancelled, leading to losses between $6 million and $10 million, the Hotel and Lodging Association estimated. Within a year of the bill’s passing, business boycotts may have cost the state as much as $141 million, according to Bloomberg News. As the state’s Office of Tourism put it in its own report, “Corporate meeting industry as we know it is forever changed.”

Some hotels have also reported leisure travellers cancelling their stays due to the immigration law. Furthermore, Mexico issued a travel advisory for residents travelling to Arizona, warning, “It must be assumed that every Mexican citizen may be harassed and questioned without further cause at any time.” SB 1070 largely targets immigrants from Latin American countries, especially Mexico.

Although the number of visitors and tourism revenue showed modest growth in 2010, the last couple of years fall short of 2008 figures and are below the predictions made by the state’s hospitality industry. To respond to the fallout, Arizona formed a tourism task force dedicated to improving the state’s image. The task force launched a $250,000 public relations campaign last summer to portray Arizona as a “safe and welcoming destination” and “reflect the true implications and tangible effects that boycotts have on the lives and families of the most vulnerable tourism employees”. The Hotel and Lodging Association put forth an additional $30,000 for the cause.

The Office of Tourism remains “cautiously optimistic” about growth in 2011. The state’s Department of Commerce has predicted that the hospitality industry will gain back some of the jobs lost last year, for instance.

With such world-famous attractions as the Grand Canyon, Monument Valley and Sedona, Arizona depends on revenue from visitors. With the state already in economic turmoil, many are starting to wonder whether it can really afford policy measures that harm its image and hinder tourism.

Travelwise is a BBC Travel column that goes behind the travel stories to answer common questions, satisfy uncommon curiosities and uncover some of the mystery surrounding travel. If you have a burning travel question, contact Travelwise.

 

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