Declines continue in area tourism, business travel

June hospitality tax collections in Fort Smith and Van Buren reflect recessionary impacts and an “anomaly” of increased hotel and restaurant activity in both cities during the summer of 2008.

Fort Smith hospitality tax collections in June totaled $72,874, down 14.4% from the $85,138 collection in June 2008. Year-to-date, the city has collected $359,768, down 12.1% from the same period in 2008. The taxes are collected from a 3% tax on hotel room rates.

Van Buren collected $33,664 in June, down 12.6% from June 2008. For the year, hospitality tax collections in the city total $195,404, down 4.1% from the same period in 2008. Van Buren collects a 1% tax on lodging and restaurants.

“I was a little disappointed in our June numbers. I had hoped with all of the special events held in our area during June our hospitality businesses would have seen a boost in tourism spending,” said Maryl Koeth, director of the Van Buren Advertising and Promotion Commission.

Koeth said all tourism areas around the state are seeing declines, but believes the river valley region will rebound fast once the national economy begins to recover.

“I feel that overall we will not be hit as hard as some of the other areas of the country and we will rebound much faster. To help compensate for the slowdown in travel spending we continue to do extra advertising in markets a little closer to home,” Koeth explained.

Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, said part of the reason for the decline is the “anomaly” created when the April and June storms that resulted in millions of dollars in damage to area homes, businesses and vehicles. Indeed, the storms resulted in thousands of insurance agents, construction workers and others associated with the cleanup from the hail and wind storms kept hotel rooms booked and restaurants busy for several months.

“The anomaly was wonderful, but it gave us a false reading on everything. I’m not just using that as an excuse, it’s the explanation,” Legris said.

To his point of the anomaly, Legris noted that June 2007 hospitality tax collections were $65,746, less than 10.8% compared to the June 2009.

However, Legris said area hoteliers are telling him that corporate travel began to fall off in July 2008 and continues to decline. The local hospitality sector downturn lagged behind national the downturn, and the local sector will probably see growth return soon after a national economic recovery begins, Legris explained.

Fort Smith hospitality tax collections in 2008 totaled $803,591, 11% more than the $723,548 collected in 2007, and more than 19% above 2006 collections. Hospitality tax collections for Van Buren in 2008 totaled $410,914, up 7.4% over 2007 and up more than 14.5% over 2006.