By Wayne Schutsky
The 2018 Cactus League season is beginning this week, bringing a cash cow to East Valley businesses and municipal coffers.
The Cactus League long has had a significant economic impact on the East Valley – home to three spring training stadiums in Mesa and Tempe.
Even Chandler and Gilbert see significant tax revenue spikes during the spring baseball season, an indicator of the magnitude of economic benefits flowing from their neighbors’ facilities.
Mesa long has reigned as the king of the Cactus League due in large part to the Chicago Cubs, who have called the city their spring home for over 50 years.
The Cubs led all teams in attendance in 2017, drawing a total of 251,899 fans. The San Francisco Giants, who play at Scottsdale Stadium, ranked second with 182,518.
“Every year, it seems impossible that the next year is going to break attendance records because every game is a sellout,” Mesa Mayor John Giles said. “Being the spring training home of the Chicago Cubs has always been a safe bet.”
Mesa also benefits to a lesser extent from the Oakland Athletics, which plays at Hohokam Stadium and drew 102,212 fans in 2017, a number that ranked 10 out of 15 teams in the Valley.
A study commissioned by the Cactus League and conducted by Tucson-based FMR Associates from 2015 found that out-of-state spring training attendees contributed over $297 million to Arizona in direct expenditures with a total economic impact of $544 million.
A second study from FMR Associates estimated that the 12-month non-tourist economic impact of the Valley’s spring training facilities in 2014 was nearly $266 million.
Transaction privilege tax is the tax paid by businesses to operate in the city. It is often passed on to consumers as a sales tax.
From 2013 to 2016, Mesa averaged transaction privilege tax revenue of just over $13 million every March. That monthly number is only surpassed by December’s holiday-shopping average of over $14.4 million.
Tax revenues collected by Mesa during spring training have risen steadily since Sloan Park’s debut in 2014.
Mesa sales tax revenues of $14.6 million in March 2017 were 20 percent higher than revenues in March 2013.
Mesa sees an even more significant spike in revenue from the bed tax levied on hotels during Cactus League play. In 2017, Mesa’s bed tax revenue in March of $729,307 was more than the total bed tax collected in June, July and August combined.
Bed tax revenues have grown in March every year since 2014, and the total bed tax revenue in March 2017 is roughly 38 percent higher than it was in March 2013, an increase that outpaces inflation.
Much like Mesa, Tempe – the spring home of the Los Angeles Angels at Tempe Diablo Stadium – has earned a significant amount of its bed tax revenue in March for many years.
From 2013 to 2017, it is the second-highest grossing month for bed tax revenue in Tempe, bringing in an average of $724,000 during that time.
Tempe saw an immediate and significant increase in transient lodging tax revenue during Sloan Park’s first year of operation, an indication that the city is benefiting from its close proximity to the facility.
The city collected $901,000 in transient lodging tax in Sloan Park’s first year of operation in April 2014, a 35.3 percent increase over the year prior. That’s a staggering increase considering the city’s bed tax revenues fell by 1.1 percent annually in April 2012.
The Angels, ranked seventh in the Cactus League with attendance of 114,780 in 2017, are expected to be an even more popular draw this year since the team signed Japanese phenom Shohei Ohtani in the offseason.
With Ohtani on board, Tempe could see its hotel occupancy rate rise from 88 percent last year to 89 or 90 percent this year, said Michael Martin, Tempe Tourism Office executive vice president.
Tempe is poised to take advantage of the additional guests as it added a Fairfield Inn, a Hilton Garden Inn and a Home2 Suites over the past year. The addition of those 450 new rooms brings the city’s total to 50 hotels with a total of 6,374 rooms.
And, like its three East Valley neighbors, Tempe has aggressively courted spring baseball fans outside Arizona to consider the city as their base of operations during the season
Tempe’s ad buys focused on Californians and people living in cold-weather cities like Denver, Seattle and Chicago.
One campaign with Weather.com flashed a message encouraging viewers to visit Tempe whenever the temperature in their home city dropped below 55 degrees, said Martin.
Gilbert also has courted out-of-state fans.
“March has consistently been our best month for occupancy and overall demand, while having the highest average-daily-rate of any month,” Gilbert tourism administrator Glenn Schlottman said.
Gilbert’s ad campaigns included online pitches targeting fans planning to attend games at Wrigley Field in Chicago or Oakland Coliseum. Following the baseball season, Gilbert, too, engaged in weather-focused ad campaigns in Oakland and Chicago.
Gilbert will continue to invest in advertising after spring training begins, to encourage them to explore Gilbert, Schlottman said.
“We started by promoting Gilbert as a home base for spring training to Chicago Cubs and Oakland Athletics fans,” he said. “We also have plans to attract spring training visitors, whether staying in Gilbert or not, to our restaurants and attractions while they are in town.”
Chandler, on the other hand, does not invest in ad campaigns.
“We provide some (spring training) information on the VisitChandler.com website and mention it in our visitors’ guide – but that is the extent at this time,” Chandler Tourism Development Coordinator Kimberly Janes said.
Regardless, both Chandler and Gilbert reap some Cactus League benefits.
March is the second most prosperous month each year for Chandler in bed tax collections behind April. Revenues averaged $421,604 in March between 2015 and 2017.
Gilbert brings in an average of just over $69,000 in bed taxes in March, according to numbers provided by the town. That average ranks second behind April’s average of $72,644.
For additional infromation, visit our Spring Training Guide.