Hospitality tax collections down 13.2% in Fort Smith, Van Buren

If Frank owned a hotel or restaurant in the Fort Smith/Van Buren area, he might croon that 2009 was not a very good year. (And don’t you dare ask, “Frank who?”)

December 2009 hospitality tax receipts in Van Buren totaled $29,278, down 6.3% compared to December 2008. For all of 2009, the city collected $381,372 in hospitality taxes, down 7.1% compared to 2008. Hospitality tax collections for Van Buren in 2008 totaled $410,914, up 7.4% over 2007 and up more than 14.5% over 2006. Van Buren collects a 1% tax on lodging and restaurants.

Maryl Koeth, director of the Van Buren Advertising and Promotion Commission, said December lodging revenues were 1.29% below December 2008, and December restaurant collections were 8.91% below December 2008.

December hospitality tax collections in Fort Smith were $46,022, down 4.3% compared to December 2008. For the year, Fort Smith hospitality tax collections totaled $671,912, down more than 16% from 2008. Fort Smith hospitality 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.

The 2009 numbers suffered from a “big falloff” in corporate travel and in being compared to the “boom year” of 2008, said Claude Legris, executive director of the Fort Smith Advertising and Promotion Commission. The 2008 boom was primarily caused by thousands of construction workers, insurance adjusters and others in the area responding to two damaging wind and hail storms that hit Fort Smith and Van Buren.

Jeff Collins, the economist for The City Wire’s The Compass Report, said current national economic conditions are “substantially impacting business and leisure travel,” which has resulted in the lower tax collections and a drop in hotel and restaurant jobs.

“In addition to the tax revenue implications or declining activity, there are also employment impacts from reduced demand for hotel rooms. This is evident in employment statistics for the hospitality sector which includes hotel workers.  Recent data from the U.S. Bureau of Labor Statistics indicates a loss of an estimated 400 jobs, a loss of 4.4 percent of employment in the sector,” Collins noted.

The region employed 9,000 in the hospitality sector in December 2008, with sector employment falling to an estimated 8,600 in December 2009.