Signs of Life in Bisbee, Ariz.

The tourism-dependent old mining town is hopeful that business is on the upswing, thanks in part to cheaper gas

Last year was difficult for Bisbee. Unemployment spiked to 7.1% in December, compared with 5.4% a year earlier. The number of visitors to the historic mining town, which depends significantly on tourism, increased 5%, to 61,000, but they seemed to be making shorter visits and spending less money. Accommodation receipts were down 12% in November compared with a year earlier, says Robert Carreira, director of the Center for Economic Research at Cochise College in Douglas, Ariz. Retail sales for November, the most recent month for which figures were available, declined nearly 8% to $2.5 million. Restaurant and bar sales were up 0.6% to $618,000.

Those numbers correlate all too well with the occupancy trends at the Letson Loft Hotel, whose owners had been anticipating a soft year when contacted by BusinessWeek SmallBiz a year ago. Kenneth Walker, co-manager with his wife, Patsy, of the eight-room boutique hotel, which has two full-time employees and about $250,000 in annual sales, says occupancy was down about 11% for 2008. From December 2008 to February 2009, however, Walker says he saw significant signs of improvement. Bookings for the three months climbed 30% compared with the same period a year ago. "The decline has stabilized and there are indications now that it is actually turning around," Walker says, adding that the drop in gasoline prices has helped bring in highway travelers.

Joanne Berry, owner of Bisbee Fine Art & Framing, seconds that encouraging point of view. Although her store's revenues dropped some 8% in 2008, that's still a lot better than the 20% decline she experienced in 2007. And Berry's got the optimism common to so many entrepreneurs, saying: "I am convinced that this will be my best year ever."

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