Northwest Arkansas hospitality tax revenue sets quarterly record

by The City Wire staff ( 34 views 

More visitor traffic in Northwest Arkansas’ four largest cities helped push hospitality tax collections up 7% in the second quarter, compared to year-ago period.

From Bentonville down to Fayetteville the combined cities collected $1.523 million in hotel taxes and prepared food tax during April, May and June. Collections increased from $1.423 million in the same period last year, marking the best second quarter on record for the local sector.

Springdale, Rogers, Fayetteville and Bentonville each collect a 2% room tax on hotels and meeting space. Bentonville and Fayetteville collect a 1% tax and 2% tax, respectively, on prepared food.

Through the first half of this year collections among these cities totaled $2.764 million, up 6% from $2.606 million in 2013.

Bentonville set the upward pace with an increase of 9.28% in the quarter fueled by a 10.20% growth in food taxes behind continued restaurant expansion in the city. Bentonville collected $329,791 from the prepared food tax, a gain of $30,663 in added revenue.

Kalene Griffith, CEO of the Bentonville Convention and Visitors Bureau, said Bentonville’s food scene is growing in popularity with the unveiling of the “high South cuisine” concept, which is unique to this region.

“Our tourism draw also continues to be a major factor for Bentonville and the region this summer. I think as more consumers are opting for stay-cations, visitors from around the state have found plenty do in Northwest Arkansas even as day-trips,” Griffith explained.

She said Crystal Bridges Museum of American Art continues to be a big draw and their promotional “State of the Art” campaign is having some positive impact on travel to Bentonville.

“We are also fortunate to have Wal-Mart and all the normal business traffic in and out on a weekly basis. This summer has been especially strong as May and June were our largest months ever,” Griffith said.

Bentonville collected a total of $505,905 in hospitality taxes for the second quarter, up 9.28% from $462,932 rung up in the year-ago period. Griffith expects a solid third quarter as bus tours pick up and the normal seasonal traffic is spurred on by Razorback football, Bikes, Blues & BBQ and the craft fairs.

The Fayetteville Advertising and Promotion Commission reports hospitality tax collections of $710,807 for the second quarter, a gain of 5.15% from the year-ago period. 

Marilyn Heifner, director of the Fayetteville A&P, reports that collections in May and June also were a record months. In May, collections jumped 3.43% to $236,098 as six groups convening in Fayetteville rented 1,280 rooms with an economic impact of $3.45 million. June was also a record month with revenue collections of $243,770, up 11.39% from the same month last year.

Food taxes collected in Fayetteville comprise the bulk of the revenue at $565, 675. The top grossing restaurants in the city for the first half of the year include: $28,399, University of Arkansas dining hall managed by Chartwell Compass; $26,182, Chick-fil-A on Joyce Avenue by the Northwest Arkansas Mall; $22,351, Chick-fil-A on Razorback Road; and $21,436, Olive Garden.

Hotel taxes totaled $145,122 for the first half of the year, lead by stronger revenues at The Chancellor Hotel in May and June. The Chancellor is the top grossing hotel in the city so far this year.

Heifner said future events booked as of June will be attended by approximately 10,121 people, 750 rooms with an estimated economic impact of $2.485 million.

The Springdale Advertising and Promotions group reported total hotel tax collections of $96,794 in the second quarter, growing 7.98% from the year-ago period. The city’s collections have continued to show strength each month of this year.  

June was a good month with taxes totaling $30,338, helped by several groups visiting the area for sports recreation, which is one area Springdale continues to recruit heavily.

Roger Davis, general manager for the Holiday Inn and Convention Center in Springdale, also expects a strong fall season and said July was a record month to start the third quarter. He has expressed some concern for the extra rooms expected to come online in next year given that there is already an excess supply of rooms in Northwest Arkansas for much of the year.

STR reports that occupancy levels across the region rose to 72.1% in June, considerably higher than the 67% reported in June 2013. For the first half this year occupancy levels across the region averaged 56.3%, up from 53.5% from the same period last year.

The average daily room rate for the first half of this year was $81.86, and for the recent quarter the rate averaged $83. This is compared to $78.93 in the first half of 2013, and quarterly average rose 3% from $79.44, according to STR.

The new $12 million Hilton Garden Inn in Fayetteville will bring 115 more rooms into the local market by the end of this year. The Sheraton Four Points Hotel in Bentonville opening has been pushed to 2015. That facility is expected to have 105 rooms with a meeting space.

The STR report tracks 98 properties in the region, with a combined 8,150 rooms, this is down 119 rooms from a year ago, as the Days Inn in Fayetteville on College Avenue was sold to CVS Caremark for construction of a new retail pharmacy store.

Hotels in Rogers had their best quarter on record with total tax collections of $210,410, up nearly 8% from the year-ago period. 

Allison Dyer, executive director of Visit Rogers, said each month in the quarter topped all previous periods as business and leisure travel returned after a sluggish and cold first quarter.

“June is always huge for us. It starts with Wal-Mart’s annual meeting and then we host the state’s poultry convention, followed by the Daisy Gun competition and the LPGA. It’s always a tough comparison month for us, but this year we managed to set a record,” Dyer said.

Visit Rogers reported $75,073 in collections in June, a gain of 7.75% from the same month last year.

David Lang, general manager at the Embassy Suites in Rogers, said the hotel had its best second quarter on record because of robust business travel and an uptick in weekend conventions and meeting group. He said the hotel has actively recruited weekend business.

“The AMP is also helping to drive traffic to the hotel. We are finding some people would rather get a room and walk over to the concert venue than hassle with parking and traffic, especially if they want to enjoy cocktails,” Lang said.

Dyer expects another strong fall, weather permitting. 

“In September the city will host 125 Arkansas Women Bloggers for their annual conference at the Embassy Suites. It’s great to have these social/tech savvy visitors in Rogers, sharing their experiences via social media all weekend long,” Dyer said.

Rogers also is hosting a Poultry Nutrition Symposium for 250 people from around the region during September. Dyer said 600 teachers will be in Rogers in October for an English as a Second Language conference. Their group affiliation is TESOL.

Hospitality Tax Collections (January through June)
2014: $908,150
2013: $823,550
2012: $749,631

2014: $1.329 million
2013: $1.288 million
2012: $1.229 million

2014: $158,724
2013: $147,552
2012: $133,759

2014: $368,803
2013: $347,586
2012: $328,459