Tourism tax revenue, sector jobs up in Fort Smith area and state

by The City Wire staff ([email protected]) 76 views 

Barring a surprise drop in November and December, travel and tourism tax collections in Fort Smith and Van Buren should end the year on a high note, and Arkansas’ 2% tourism tax should set a new collections record.

The continued positive trend in local and state travel and tourism data come as the federal Bureau of Economic Analysis reports a decline in travel and tourism spending in the third quarter. The BEA reported Dec. 18 that such spending grew at an annual rate of 1.3% after growing 3.3% in the second quarter. Spending during the third quarter of 2013 grew at a rate of 3%.

Hospitality tax collections in Van Buren for the first 10 months of 2014 total $364,148, up 1.73% compared to the same period in 2013. The city collects a 1% tax on lodging and a 1% prepared food tax.

October receipts totaled $36,803, up 3.2% compared to October 2013. Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission, is optimistic about what the year-to-date collections suggest for the industry, but plans to submit a conservative budget for 2015.

“Tax receipts continue to increase year over year in both prepared foods and lodging. I'm cautiously optimistic that this climb will continue in 2015. Based on this year's slow increase in revenue for all sectors, I am projecting a 1% increase in revenue for our 2015 budget,” Koeth said.

Collections in Van Buren during 2013 totaled $423,221.83, remarkably close to the $423,222.91 during 2012. 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.

For the first 10 months of 2014 the Fort Smith Convention & Visitors Bureau collected $656,368, up 5% compared to the same period of 2013. The city collects a 3% tax on lodging.

October hospitality tax collections in Fort Smith totaled $72,291, up an impressive 13.2% compared to October 2013.

Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, said hoteliers in the city are reporting more activity.

“Citywide the lodging industry showed an 8.4% increase in occupancy and an increase in average daily rate of 3.6% which combined to create a 12.3% increase in revenue per available room. Initial reports from hoteliers indicate a positive month of November as well,” Legris said.

Collections in Fort Smith during 2013 totaled $731,057, down 2% compared to the same period in 2012. 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.

The tourism tax collection data in the Fort Smith area also correlates with job estimates provided by the U.S. Bureau of Labor Statistics. Employment in the region’s tourism industry was 9,800 during October, down from 9,900 in September and above the 9,400 in October 2013. The sector reached an employment high of 9,900 in August and maintained that level in September.

Collections of Arkansas’ 2% tourism tax during the first nine months of 2014 totaled $10.616 million, up 6.76% compared to the $9.943 million during the same period of 2013.

The 2% tourism tax set a record in 2013 by reaching $12.716 million, and the 2014 numbers are on track to beat that record.

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.

Employment recently set another record for Arkansas’ travel and tourism industry. Arkansas’ tourism sector (leisure & hospitality) employed 109,400 during November, up from 109,200 during October, and above the 106,600 during November 2013. The November number, if it stands, marks a new record for employment in the sector.

Although national travel and tourism spending declined in the third quarter, the industry remains on an upward trend.

Employment in the travel and tourism industries fell 1.7% in the third quarter of 2014 after increasing 1.9% (revised) in the second quarter. This marks the 18th consecutive quarter of employment growth in the travel and tourism industries, according to the BEA.

By comparison, overall U.S. employment increased 2.1% in the third quarter after increasing 2.2% in the second quarter. “Food services and drinking places” was the most significant contributor to employment growth, increasing 2.9% in the third quarter.

“Total Tourism-Related Output” was $1.5 trillion in the third quarter of 2014. It consisted of $898.4 billion (58%) of direct tourism spending and $644 billion (42%) of indirect tourism-related spending.

“Total Tourism-Related Employment” was 7.8 million jobs in the third quarter of 2014 and consisted of 5.5 million (71%) direct tourism jobs and 2.3 million (29%) indirect tourism-related jobs.

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