Northeast Arkansas travel and tourism tax revenue a mixed bag in 2017

by Michael Tilley (mtilley@talkbusiness.net) 76 views 

The travel and tourism industry in Northeast Arkansas sent mixed signals in 2017, with the state’s 2% tourism tax posting gains in most of the key counties, but Jonesboro hotel tax revenue down for the year.

A summary analysis of the region comes from the Arkansas Tourism Ticker, which is managed by Talk Business & Politics, and is sponsored by the Arkansas Hospitality Association. The ticker uses the following three measurements to review the health of the state’s tourism industry:
• Hospitality tax collections — prepared food tax and lodging tax — of 17 Arkansas cities;
• Tourism sector employment numbers as reported by the U.S. Bureau of Labor Statistics; and
• Collections of Arkansas’ 2% statewide tourism tax.

2017 marked the third consecutive year of growth as measured by the Arkansas Tourism Ticker. Statewide results for the 2017 Tourism Ticker report are:
• 2.18% increase: Hospitality tax revenue in 2017 among 17 Arkansas cities reviewed for the Arkansas Tourism Ticker compared with 2016 revenue.
• 2.8% increase: Collections of Arkansas’ 2% statewide tourism tax in 2017 compared with 2016.
• 2.94% increase: Increase in Arkansas’ tourism industry jobs in 2017 compared with 2016.

Montine McNulty, executive director of the Arkansas Hospitality Association, said she is impressed with the resiliency of the industry.

“It is very encouraging news to see year-over year-numbers increase. Travel and hospitality are still a dominant  force in our state’s economy. The jobs increase once again is very good news,” McNulty said.

The combined hospitality tax collections in the 17 cities totaled $45.98 million in 2017, up 2.18% compared with the $45 million in 2016. Restaurant (prepared food tax) tax collections among the 17 cities totaled $33.76 million in 2017, up 1.59% compared with the $33.23 million in 2016. Hotel tax collections among the 17 cities totaled $12.22 million in 2017, up 3.82% compared with the $11.77 million in 2016.

Revenue from the 2% state tourism tax in Craighead County totaled $482,879 in 2017, up 26.79% compared with 2016. Revenue from the tax in Crittenden County totaled $346,891, up 1.87%. The two counties are among the top 10 counties in Arkansas for the amount of 2% tourism tax collected.

Revenue from the tax in Mississippi County totaled $341,927, down 8.1%. Collections in Greene County totaled $77,514, up 75%.

However, hotel tax revenue in Jonesboro fell for the first time in the four years the Arkansas Tourism Ticker has been published. Even with the ongoing addition of hotels in the city, room tax revenue totaled $673,961, down 2.64% compared with the 692,266 in 2016. But the revenue was ahead of the $639,096 in 2015, and the $558,079 in 2014.

Because hotel room rates are not as stable — weekend rates, daily rates, special corporate rates, etc. — as prices for other goods and services, a decline in revenue could be a component of pricing rather than use.

State and federal officials do not provide a breakout of travel and tourism industry employment in Northeast Arkansas. The Memphis-West Memphis metro, the closest region to the Jonesboro area, posted average monthly employment in 2017 of 68,150, a 5.1% gain compared with the 2016 average.

The regional travel and tourism sector will receive a boost in the next few years. Construction is underway on a new hotel/convention center on the Arkansas State University campus. O’Reilly Hospitality Management, based in Springfield, Mo., is building a 203-bed Embassy Suites Hotel, a 40,000-square-foot Red Wolf Convention Center and a Houlihan’s Restaurant. The project is expected to cost about $60 million.

ASU officials say the project will serve as a springboard for a new hospitality management program. Hospitality management is only offered as an emphasis, but the goal is to develop a full-fledged program once the hotel and convention center open in 2019, ASU Provost Dr. Lynita Cooksey told Talk Business & Politics.

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