Area hospitality tax collections improve in 2010

Full year hospitality tax collections in Fort Smith and Van Buren suggest the local tourism and hospitality sector is on a slow recovery from a tough 2009.

December hospitality tax collections in Van Buren totaled $30,138, up 2.9% compared to December 2009. Van Buren collects a 1% tax on lodging and a 1% tax on restaurants.

“I’m hoping this sets the trend for all of 2011. A slow steady climb back up,” said Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission.

For the year, Van Buren hospitality tax collections totaled $395,195, down just 0.62% compared to 2009. For all of 2009, hospitality tax collections were 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.

In Fort Smith, December hotel tax collections totaled $38,857, down 15.5% compared to December 2009. However, Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, said “slow pays” totaling $5,369 will trickle in after the reporting period. With those payments in the mix, the monthly decline falls to 3.9%.

Fort Smith hospitality taxes are collected from a 3% tax on hotel room rates.

For the year, hotel tax collections in Fort Smith totaled $678,934, up 1.04% compared to 2009.

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.

Collections of Arkansas’ 2% tourism tax mirrors the gain in Fort Smith. For the first 11 months of 2010, the tax has collected $10.753 million, up 1.07% compared to the 2009 period. The 2009 collection total of $11.378 million was 5.2% lower than 2008 and 1.66% lower than 2007.

Tax collection improvements in the region’s hospitality sector supports a November 2010 comment from Jeff Collins, economist for The Compass Report. In the special note on tourism, Collins predicted improvements.

“The hospitality industry in the Fort Smith area, as measured by hospitality related tax collections is currently improving. While the slow recovery nationally has significantly affected the sector. Tax collection data indicate for the Fort Smith and Van Buren hospitality sector things may be looking up,” said Collins, the economist for The Compass Report and the former director of the Center for Business and Economic Research at the University of Arkansas.

The Compass Report, managed by The City Wire and presented by Benefit Bank, is the only independent economic analysis of the Fort Smith regional economy.

However, the sector has seen weak employment. Fort Smith regional employment in the leisure and hospitality sector during December was an estimated 8,700, down from 8,900 in December 2009. During the past 10 years, the sector reached a high of 9,800 in August 2008.