Arkansas’ Tourism Tax Collections Set New Record In 2013

Revenue from Arkansas’ 2% tourism tax set a record in 2013 by reaching $12.716 million, and the state’s tourism chief is predicting that 2014 could be even better for Arkansas’ tourism and travel sector.

The 2013 collections were up 2.5% compared to the $12.405 million in 2012, and well ahead of the $11.378 million slump in 2009 when national economic conditions proved tough on Arkansas’ tourism industry.

In an interview with Roby Brock for the upcoming magazine issue of Talk Business Arkansas, Richard Davies, executive director of the Arkansas Parks & Tourism Department, said the recent spell of cold weather around the country may result in people wanting to get outdoors when temperatures rise. Combine that with what Davies said is an improving consumer confidence, and the state could see more travelers in 2014.

“I think we’re going to have a good season this year. I think holding on during the bad times was a victory,” Davies said in the Talk Business Arkansas interview. “From what I can tell, if the weather will let us alone for a while, we’re going to have a good year. I think people are a little more sure about the economy. I think they’ve got a little money in their pockets. And I think after this winter, they may have some severe cabin fever they want to solve. So I’m looking forward to a good year.”

MIXED RESULTS
Although collections were up in 2013, results were mixed around the state. For example, the four largest cities in Northwest Arkansas reported $5.32 million collected in hospitality taxes for the full year [1], up from the $4.99 million during 2012. The cities also reported 6% gains in their fourth quarter hospitality tax receipts, compared to the prior year. Fayetteville, Rogers, Springdale and Bentonville collected $1.31 million in hotel and food taxes during the months of October, November and December.

While October and November were strong months, inclement weather has since prompted cancellations and lackluster traffic among business and leisure travelers, said Roger Davis, general manager of the Springdale Holiday and Convention Center.

Hotel operators across Northwest Arkansas have recorded revenue in excess of $128.564 million during 2013, up 10.7% over 2012, according to Smith Travel Research.

Hospitality tax collections were not as strong down the road from Northwest Arkansas. Collections in Van Buren during 2013 [2] totaled $423,221.83, remarkably close to the $423,222.91 during 2012. December collections were $32,071, down 1.2% from the $32,451 in December 2012. The city collects a 1% tax on lodging and a 1% prepared food tax.

Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission, said wintry weather in December likely resulted in the monthly decline. She said the January tally will also see a weather effect. Koeth said she expects 2014 tourism activity to be similar to 2013.

“Lodging ended the year above last year, but restaurants were down and are staying down. Due to the economy, specifically the smaller paychecks, we continue to see a change in the dining out patterns of consumers. I don’t see that changing in the near future,” she said.

Collections in Fort Smith during 2013 totaled $731, 057, down 2% compared to the same period in 2012. The gap in collections improved through the year with first quarter collections were down more than 6% compared to the 2012 quarter. For the fourth quarter, collections were up 0.62% compared to the 2012 quarter. The city collects a 3% tax on lodging.

TOURISM INDUSTRY EMPLOYMENT
The rise in overall tax collections is reflected in job numbers for the industry. Arkansas’ tourism sector (leisure & hospitality) employed 103,400 during December, down from a revised 103,700 during November, and above the 102,900 during December 2012. At a revised 103,700, the November employment tied a record for the sector that was first reached in January 2013.

Montine McNulty, director of the Arkansas Hospitality Association, noted in the Talk Business interview that the tourism industry also is a job engine for the state.

“One thing about our industry is we continue to need people. It’s not going to be replaced by robotics or anything else. We’re in the service industry and we’re going to have to have people,” McNulty explained.

Travel and tourism industry employment also reflects tax collections in Northwest Arkansas and the Fort Smith metro area.

Employment in the Northwest Arkansas tourism industry was 21,400 during December, down from 21,900 in November and up from 20,400 during December 2012. September employment of 22,300 was a new record for the sector.

Employment in the Fort Smith metro tourism industry was 9,000 during December, down from 9,100 in November and above the 8,700 in December 2012. The sector reached an employment high of 9,800 in August 2008.