Arizona immigration law: boycotts starting to take a toll

Boycotts from Mexico and several US cities aren't likely to throw Arizona back into a recession, but the fallout from the Arizona immigration law is hurting some businesses in the short term.

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    A protester attended a May 1 rally at Los Angeles City Hall against the Arizona immigration law. Los Angeles has banned city employees from traveling to Arizona on official business.
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At the Adobe Rose Inn Bed and Breakfast just two blocks from the University of Arizona, the phone calls from potential visitors have all but stopped, and innkeeper Jim Hook suspects he knows the reason: the state's controversial immigration law.

The law, which requires local and state authorities to determine the status of suspects they believe to be in the country illegally, has spawned economic boycotts and legal challenges since Gov. Jan Brewer signed it in April, and those boycotts appear to be having an effect.

IN PICTURES: The US/Mexico border

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So many meetings and conventions are being canceled that the Arizona Hotel & Lodging Association has stopped keeping track. The streets of Nogales, Ariz., often filled with Mexican shoppers, were so empty during a recent boycott that stores closed early. And Mr. Hook of the Adobe Rose knows of at least one family that canceled its reservations because of the law – taking a trip to Boston instead.

In the long term, such boycotts "tend to essentially blow over, either because the issue was settled or people just forget about it," says Elliott Pollack, president of Elliott D. Pollack & Co., a real estate and economic consulting firm in Scottsdale, Ariz.

“In other words, the effect will be in the near term,” says Mr. Pollack.

But with the state only now recovering from one of the most severe recessions in its history, those near-term impacts are being felt.

“This is just another burden,” says Hook, noting that one cancellation for his six-room inn is a major hit. “Small businesses are going to suffer the most.”

Conventions canceled

US cities including Los Angeles, San Francisco, and St. Paul, Minn., have banned official travel to Arizona, saying the state immigration law might lead to racial profiling. Mexico has also issued a "travel alert" for the area.

Phoenix officials have estimated that they will lose $90 million during the next five years in the hotel and convention center business. Statewide, the Arizona Hotel & Lodging Association recorded 23 meetings and conventions canceled – an estimated $10 million hit – before it stopped keeping track, spokeswoman Kristen Jarnagin says.

Cancellations are still coming in but people are not giving reasons, “probably because they prefer to stay out of the controversy,” she says.

She adds that reservations, which groups normally book one to three years in advance, also are down: “The phone is not ringing.”

Ms. Jarnagin says the boycotts are hurting the wrong people. “Our hope is that people can separate tourism from the politicians,” she says.

Border towns become ghost towns

In the border town of Nogales, where Mexican visitors are vital to the local economy, heightened security measures had already slowed the flow of daily border-crossers who shop in Arizona. But more recently, the local chamber of commerce has had to launch a campaign to promote its businesses in Mexico after a recent two-day boycott by Mexican shoppers left streets deserted.

“You could tell the difference because it’s normally very busy,” says Olivia Ainza-Kramer, president of the Nogales-Santa Cruz Chamber of Commerce. “Stores had to close early.”

A total of 3.8 million visitors to Arizona came from Mexico in 2008, according to the Arizona Office of Tourism.

IN PICTURES: The US/Mexico border

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