‘Smaller paychecks’ push area tourism taxes lower in 2013

Hospitality tax collections in Fort Smith and Van Buren were down in 2013 compared to 2012, ending two consecutive years of gains for both cities. The tourism chiefs in both cities say 2014 will continue to be challenging for the regional tourism industry.

Collections in Van Buren during 2013 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.

“January numbers are already reflecting (a) slow down caused by the bad weather. Lodging numbers for December were strong, but restaurants struggled with the icy, snowy weather and a weak economy. Preliminary numbers are showing this same trend for January 2014,” Koeth said.

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.

During 2012, Van Buren hospitality tax collections totaled $425,554, up 5.2% compared to the 2011 collections. Hospitality tax collections in Van Buren during 2011 totaled $429,561, up 2.34% compared to 2010. The 2011 collections ended a two-year skid in Van Buren.

FORT SMITH
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.

The 2013 tally in Fort Smith was boosted by a healthy jump in December. December collections were $52,204, up 15.7% compared to December 2012. Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, said “a wide range of factors” caused area hotels to be more full than normal.

Candlewood Suites reported a 40% increase in collections thanks to several construction crews staying in the extended-stay hotel. Hampton Inn saw December revenue jump 29% thanks to utility crews using the hotel as a base while they worked winter weather related power outages.

The Holiday Inn in downtown Fort Smith hosted a robotic competition that helped boost the hotel’s revenue 26% in December. In 2012, the competition was split between days in November and December, Legris explained. Also, the La Quinta Inn was up 46% in December because all its rooms were open. In December 2012, areas of the hotel were closed for renovations.

During 2012, Fort Smith hospitality tax collections totaled $746,182, up 5.37% compared to the 2011 period. The 2011 collections were up 4.3% compared to 2010.

Legris said he is projecting a 4% increase in collections during 2014, but admitted that reaching the target “will be a little bit of a challenge.”

TOURISM EMPLOYMENT, ARKANSAS COLLECTIONS

Employment in the region’s 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.

Average monthly employment in the Fort Smith metro tourism sector ended a two year decline in 2012. During 2007, 2008 and 2009, the average monthly employment was 9,300. That fell to 8,700 during 2010, 8,500 during 2011, but rose to 9,000 during 2012. The sector reached an employment high of 9,800 in November 2008.

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.

Arkansas’ 2% tourism tax receipts totaled $11.967 million for the first 11 reporting months of 2013, up 2.95% compared to the $11.624 million during the same period of 2012.

Arkansas’ 2% tourism tax receipts totaled $12.405 million during 2012, up 3.16% compared to the $12.025 million during 2011. The gains marked the third consecutive year of improving tourism tax revenue.