Local hospitality sector growth continues

Northwest Arkansas’ hospitality sector continues to register robust growth posting revenue of $2.799 million through the first half of 2013. Taxes collected on prepared food and lodging revenue in the region rose 15% as consumers opened those wallets a little wider in the second quarter, despite a somewhat stagnant national economy.

The cities of Bentonville, Rogers, Springdale and Fayetteville collect a 2% room tax on hotel and meeting space, Bentonville and Fayetteville also collect a 1% tax on prepared food.

HOTEL GAINS
The local hotel sector continues to see better results as business travel has improved and groups and conventions are once again booking rooms.

“So far, February through June have all been record breaking months for the Rogers hotel tax. The second quarter was great for conventions with the FLW fishing tournament, Questers National Convention, Arkansas Master Gardeners, Poultry Festival, LPGA, and Daisy BB Gun Championships to name a few of the conventions that visited during the recent quarter,” said Allyson Dyer, executive director for the Rogers Convention & Visitors Bureau.

Dyer is looking forward to a busy season this fall with Razorback football, Bikes Blues and BBQ, craft fairs as well as several other conventions on the books.

The hotel industry STR report provided by Smith’s Travel Research indicates 99 hotels in the two-county area posted cumulative sales revenue of $26.492 million in the first quarter of 2013, a 12.4% increase from 2012, and the best start since 2007. The region’s 8,299 rooms were occupied 53.5% of the time, improving from 51.3% in the prior year. Room rates averaged $78.90 per night, up 5.4% from a year ago.

Roger Davis, general manager for the Springdale Holiday Inn, said there is still some slight discounting for large groups, but overall revenue is growing as the rooms are filling up for longer periods of time.

The U.S. hotel industry reported increases in all three key performance metrics during the first half of 2013 in year-over-year measurements, according to data from STR.

“We continue to be bullish on industry-wide performance in 2013," said Brad Garner, chief operating officer at STR. 

He said while demand for transient hotel rooms was solid for the recent quarter, year-over-year demand for group rooms has been tepid.

Hotels in Bentonville collected $267,415 in taxes from January through June of 2013, Revenue rose 20% from the same period last year. The 21-c Museum Hotel opened in February and brought in more than $25,000 in tax revenue through the end of June, boosting the city’s overall year-over-year comparisons.

In Fayetteville, hotel collections totaled $135,655 in the first half of this year. The hotel tax revenue improved from a year ago, thanks to more than $17,700 in taxes paid by the Chancellor Hotel, which opened last fall in downtown Fayetteville.

FOOD, ENTERTAINMENT
Bentonville and Fayetteville continue to see gains in the revenue collected for prepared food, despite the fact their neighboring towns do not collect the added 1% tax.

Fayetteville food venues collected $1.34 million in taxes during the first two quarters of 2013. Collections are up from roughly $1.27 million in the year-ago period.

In Bentonville, prepared food taxes totaled $556,139 during the first half of this year, rising 6.4% from the same period in 2012.

Again the top grossing restaurants in Bentonville is Eurest Dining Services which operates inside the corporate headquarters of Wal-Mart Stores Inc. This corporate cafeteria generated $31,600 in prepared food taxes in the first six months of 2013.

The next highest food venue in terms of taxes collected was Eleven, the restaurant inside Crystal Bridges Museum of American Art. Eleven collected more than $11,600 in prepared food taxes in the first half of this year. Cities from Van Buren to Bentonville have seen added hotel and restaurant traffic related to the world-class museum. Crystal Bridges expects to welcome its one-millionth visitor to the museum this week.

“Reaching one million visitors just 21 months after our opening is a huge milestone for us,” said Crystal Bridges Executive Director Rod Bigelow. “From the day we opened our doors, our goal has been to welcome visitors to experience the power of art and the beauty of nature, and we’re thankful to have been able to create these connections with such a vast audience.”

He said the museum has had a warm welcome from visitors not only throughout our region, but from across the globe.

Of those one million visitors, 64% were from Arkansas, and 20% came from the six nearby states: Missouri, Texas, Oklahoma, Tennessee, Louisiana and Mississippi. 

The remaining 16% hailed from other states in the U.S. and global addresses. The visitors include more than 27,000 school children from districts throughout the region.

Hospitality Revenue (January through June)
Bentonville
2013: $823,554
2012: $749,631
9.86%

Rogers
2013: $345,141
2012: $328,459
5.07%

Springdale
2013: $147,552
2012: $133,759
10.31%

Fayetteville
2013: $1.483 million
2012: $1.229 million
20.6%

Source: Respective cities