Arizona Grand joins list of area resorts suffering financially

PHOENIX - These are tough times for the resort industry.

Usually a magnet for vacationers and big meetings, the Phoenix-area continues to post some of the industry's biggest declines in occupancy, average daily rate and other measures, with many at the lowest levels on record, according to Smith Travel Research.

Preliminary occupancy figures in June show about 45 percent, nearly 10 percentage points, or 17 percent, below June 2008, when occupancy was already hurting. Most are calling it an industry depression, rather than recession.

Some are blaming the recession, a backlash over lavish corporate meetings, a spike in the number of new hotel rooms and the fact that Phoenix is a fly-in rather than drive-to destination.

There are other signs of distress in the leisure travel industry including major liens filed against resorts that recently expanded or renovated, and big projects being put on hold, some midstream.

Richard Warnick with the Phoenix hospitality consulting and research firm Warnick & Co. said he'd be surprised if nearly all hotels and resorts, here and across the country, weren't in technical default on their loans, falling below required minimums on debt service coverage, for example, given the sad state of travel.

In the Phoenix-area, those in default include the Arizona Grand Resort, formerly the Pointe South Mountain, and the Mondrian in Scottsdale, according to Real Capital Analytics.