SCOTTSDALE - At FireSky Resort and Spa, Jim Hollister's inbox swelled with e-mails from guests demanding cancellations just after SB 1070 became law.

But the general manager of the luxury resort said business has been pleasantly brisk lately as fewer customers seem fazed by Arizona's controversial immigration law.

"I was watching carefully how business has been rolling in," Hollister said. "My summer business has never been better. … So people are traveling."

SB 1070, which makes it a state crime for an immigrant to be here without documents, triggered a boycott on Arizona's tourism industry and caused hundreds of hotel cancellations when it was signed into law in April.

A federal judge put most of the law's provisions on hold pending a court challenge, but the boycott's hit to tourism had already compounded problems created by the broader economic downturn.

Kristen Jarnagin, vice president of communications for the Arizona Tourism Alliance, expects that the worst of SB 1070's effect on Arizona's tourism industry has passed.

When the boycott on tourism was rescinded, it was the beginning of the end to the deterioration of the state brand, she said.

Still, she cautioned, "It's difficult to know what the long-term impacts will be, because when meetings book, they usually book two or three years out. So this could impact us for the next three years."

Arizona's tourism industry lost upward of $15 million when more than 40 groups canceled hotel stays in protest of SB 1070, said Jarnagin. The lost revenue doesn't include groups that may have considered booking but never made reservations, she said.

In 2009, there was more than $16 billion in tourism spending, putting more than $2 billion in tax revenue into the state and local coffers, the alliance says.

Even before SB 1070, Arizona's tourism industry was reeling from the broader economic recession as well as the so-called "AIG effect," in which large corporations were reluctant to hold lavish resort events after the government bailed out insurance giant AIG.

Brent DeRaad, executive vice president of the Scottsdale Convention and Visitors Bureau, said those existing challenges make it difficult to separate and quantify the impact of SB 1070.

Booking rates in Arizona hotels are up over 2009, but those increases lag slightly behind the national rebound, DeRaad said.

"The number of planners considering Arizona for their meetings right now, that number is smaller than it used to be," DeRaad said. "In some cases, certainly not all cases, longtime customers are saying, 'We need to take a little break from Arizona, at least until some of the fury with regard to 1070 dies down.' "

While large-meeting cancellations have been the biggest hit to tourism revenue, the impact of individual visitors now avoiding the state hasn't caused as severe a financial impact, DeRaad said.

Arizona tourism revenue

1999 $13.1 billion

2000 $14.2 billion

2001 $13.4 billion

2002 $13.3 billion

2003 $14.7 billion

2004 $15.9 billion

2005 $17.6 billion

2006 $18.7 billion

2007 $19.1 billion

2008 $18.5 billion

2009 $16.6 billion

SOURCE: Arizona Office of Tourism