Hospitality tax gains continue; sector employment falls

Area hospitality collections continue to improve, despite a continued decline in hospitality sector employment in the Fort Smith region.

Van Buren hospitality tax collections during October totaled $32,150, up 1.2% compared to October 2009. For the year, collections of the tax total $362,200, down 0.98% compared to the 2009 period. Van Buren collects a 1% tax on lodging and a 1% tax on restaurants.

For all of 2009, the city collected $381,372 in hospitality taxes, down 7.1% compared to 2008. Hospitality tax collections for Van Buren in 2008 totaled $410,914, up 7.4% over 2007 and up more than 14.5% over 2006.

The October activity may be higher than the collections show.

“We have 12 businesses that are past due on their October tax payments. That’s a little higher than usual and that usually means there is a slight bump in the economic road,” said Maryl Koeth, executive director of the Van Buren Advertising and Promotion Commission. “Factoring in the unpaid collections, we’ll still exceed October collections from 2009 and I’m still cautiously optimistic about the overall economic recovery.  I’ll feel much better about a long term recovery when I see the hospitality sector employment numbers begin to rise.”

Hospitality employment continued a decline that began in mid-2009. October 2010 saw 8,800 jobs in the regional hospitality sector, down from the 9,100 jobs in October 2009.

In Fort Smith, hospitality tax collections were $63,879, up 20% compared to $53,258 in October 2009.

During the first 10 months of 2010, collections of the tax total $589,679, up 2.7% over the $573,785 collected in the 2009 period.

For 2009, Fort Smith hospitality tax collections totaled $671,912, down more than 16% from 2008. Fort Smith hospitality tax collections in 2008 totaled $803,591, 11% more than the $723,548 collected in 2007, and more than 19% above 2006 collections. Fort Smith hospitality taxes are collected from a 3% tax on hotel room rates.

“October collections were up in spite of the Howard Johnson closing, which contributed $1,046 in October of 2009,” Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, said in an e-mail note. “The hotels showing the largest increases were the Marriott, the Holiday Inn City Center, the Candlewood Suites and the Homewood Inn and Suite. The manager of the Candlewood says his November was even better than his October so we hope to see this positive trend continue throughout the rest of the fall.”