Area hospitality industry sees slow corporate travel, softer restaurant sales

Fort Smith and Van Buren hospitality tax collections continue to reflect a weakened economy, with January-July collections down more than 13% in Fort Smith.

The collections are also being compared against booming 2008 activity related to the more than $80 million in increased commercial and residential repair activity resulting from severe hail and wind storms in April and June 2008, respectively.

In Van Buren, the July collections were $34,086, down 8.2% compared to July 2008. For the year, the Van Buren Advertising and Promotion Commission has collected $229,490, down 4.8% from the same period in 2008. (Van Buren collects a 1% tax on lodging and restaurants.) Hospitality tax collections for the city in 2008 totaled $410,914, up 7.4% over 2007 and up more than 14.5% over 2006.

“Van Buren restaurants are still seeing fairly soft restaurant sales. My restaurant owners aren’t predicting gloom and doom, but they aren’t seeing a real rally yet either,” explained Maryl Koeth, director of the Van Buren Advertising and Promotion Commission. “August is traditionally a very slow month for restaurant and lodging revenue as summer travel slows and local consumers are spending those hard earned dollars on school clothes and supplies.”

Koeth said the July 2009 collections are up about 3.5% over July 2007. She also said July revenue for Van Buren hotels was “down considerably” compared to July 2007.

Fort Smith saw July hospitality tax collections of $56,971, down 22.6% from July 2008, and down about 7% from July 2007. Year-to-date, Fort Smith hospitality tax collections are $416,740, off 13.7% from the same period in 2008. The taxes are collected from a 3% tax on hotel room rates. 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.

Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, also cited the tough 2008 comparison and the slow economy for the declines.

“The corporate business has all but disappeared,” Legris explained.