City A&Ps Lure Visitors, Trade

Northwest Arkansas cities hope to buy tourist trade with their slick multi-million dollar advertising budgets.
In 2006, total collections for the five advertising and promotions commissions reached $4.03 million, an increase of more than 10 percent from 2005.
The commissions re-invest the tax money from hotels and restaurants to attract even more people the following year.
The A&Ps, established under state law, can collect taxes of up to 3 percent in first class cities. The tax can be applied to gross receipts on hotels, motels and restaurants’ sales of food. Law dictates that commission revenues can only be used for the advertising of the city, acquiring convention centers and operating facilities that will attract tourists.
“Our goal is short-term economic development,” said Tom Galyon, executive director of the Rogers Convention and Visitors Bureau. “We want them to come here, stay in our hotels, eat in our restaurants, see our attractions, shop in our shops, leave all their money and go home — and then tell everybody what a good time they had.”
The commissions also follow state law in their composition. Each must have seven members: four people from the industry, two city council members and one from the public at large. These members collect budget requests from city attractions and decide on allocations.
While the commissions are proud to boast annual increases in revenue, they are just starting to understand their returns on investments.
Bentonville
The Bentonville Advertising & Promotions Commission collected $1.19 million from hotels and restaurants in 2006. The city established its hospitality tax in 1995, with a 2 percent tax on hotels and motels, and a 1 percent tax on restaurants.
About $733,000 came from the 150 restaurants. The Wal-Mart cafeteria kicked in $34,321, a distant leader of sales in the city.
About $457,000 came from the 26 hotels during 2006. The commission also collected $3,000 from its gift shop and another $5,000 from the Winter Wonderland events.
As for expenditures, $314,000 was paid for the cost of operations, including staff salaries and office supplies. The commission paid $378,693 for parks, because it is still paying for the land, and $367,021 for marketing. About $174,890 went to event promotions and $87,011 went to ad placements, such as in Southern Living magazine, SEEN magazine and Motor Coach Canada.
The commission handles advertising in-house, designing ads and placing Web links itself.
Kalene Griffith, president of the Bentonville Convention & Visitors Bureau, said Bentonville will start to push for more trade shows.
“A trade show to us is like a walking billboard for our community,” she said.
With two convention centers, which hold up to 1,000 patrons, the city will target smaller conventions, corporate retreats and reunions.
The commission receives little feedback or input on the effectiveness of its promotions. Griffith looks to change that.
“We’re partnering with Rogers so that we can do a more satisfactory type of survey that would assist us in making sure that we see the money that is spent in the area,” she said.
Rogers
Even though the individual commissions are competing to attract tourists and dollars to their communities, Bentonville is teaming up with the Rogers A&P.
Together, they will design surveys to better understand the impact of their investments. The commissions want to understand the numbers attracted by promotions and the amount of money people spend when visiting.
The commissions will design software that will help their staffs book rooms during events, allowing them to get a more accurate count of visitors. A Destination Guide is also in the works as a way to promote the region, rather than the individual cities.
Galyon said the goal of his commission is, “to positively impact the Rogers economy, promoting the area as a recreation, business and convention destination.”
Some cities use formulas and multipliers to determine how much the commission is driving tourism, but Galyon is now working on those calculations. He said he wants to use reliable research versus numbers “pulled out of the air.”
Rogers collected $439,466 from the 2 percent tax levied on its 16 hotels. The city can thank the Embassy Suites for generating about $183,000, while the second leading hotel was the Hampton Inn with about $60,000.
In 2006, Rogers spent the largest portion of its budget on operations, $195,000.
About $180,000 went toward advertising. The commission spent $150,000 on publication ads, designed by its ad agency of record, Maloney Marketing Group. Another $12,000 was used to promote Northwest Arkansas Regional Airport and the Rogers Municipal Airport.
The commission spent $126,500 on promotions, for items such as brochures and advertising of trade shows.
In 2007, the city is projecting collections of $535,000. Carrying over $35,000 from 2006, the commission will have a budget of about $570,000.
Fayetteville
Marilyn Heifner, commission executive director, said the Fayetteville A&P collected $2.07 million in 2006.
Fayetteville has the largest collections in Northwest Arkansas with a 2 percent tax on hotels and a 2 percent tax on restaurants.
The Radisson Inn (now The Cosmopolitan) was the largest player for hotels, contributing $38,231. The top restaurants were the Olive Garden Italian Restaurant with $42,639 and Red Lobster with $35,610.
Fayetteville’s well-known heavy hitters are Bikes, Blues & BBQ and Razorback football games.
In 2006, the commission spent $20,000 on Lights of the Ozarks, an event that draws 300,000.
“That has a minimal impact on the hotels but it has a major impact on the restaurants, because when people come down to look at the lights, they come down to eat,” Heifner said.
The Fayetteville A&P also spends money on promoting attractions such as the Walton Arts Center ($26,724), Botanical Garden Society ($17,500) and the Hunters Extravaganza ($20,000).
The commission allocated $672,120 to pay off bonds on the Town Center and $247,768 to operate the Convention & Visitors Bureau with its staff of five.
The commission uses Little Rock-based Sells/Clark as its advertising agency of record. The A&P spent $445,000 to advertise Fayetteville through brochures and ads in local and national publications.
Heifner said the commission is working to get a better assessment of the number of tourists and the money they spend. The results of a survey conducted last year found that the average tourist spends $184 per visit, not just per day.
Springdale
The Springdale A&P collected $294,929 in 2006, up 9.9 percent from $268,395 in 2005.
That dollar figure comes through the 1.5 percent tax, established in 1991, on the city’s 22 hotels and motels. The Holiday Inn led the way with a collection of $62,065, while the Hampton Inn was he second-leading hotel with $35,144.
The commission contracts to CJRW/NW in Johnson. The commission spent $108,000 on advertising with the group. CJRW designs and produces ads in newspapers and magazines across the country, brochures and newcomers guides.
Other expenditures include $20,600 for Rodeo of the Ozarks, $18,384 for the Jones Center for Families and $10,000 for Feather Fest. The commission also spent $8,338 to promote the All-Star Sports Arena.
Springdale’s hotel business heats up in the fall, in large part due to Razorbacks football as fans fill up hotels in Fayetteville. Vendors and shoppers also help fill hotels during the War Eagle Mill Craft Fair.
Rhonda Hughes, vice president for operations at the Springdale Chamber of Commerce, said she uses the state calculations for estimating tourists’ spending. The ADP&T’s latest study shows a traveler spends $60.42 per day.
Siloam Springs
While Siloam Springs does not have an A&P commission, the city does collect a 2 percent tax on hotel guest rooms.
The city collected $42,523 in 2006 on its 10 hotels and motels.
Paul Calloway, city treasurer, said hotels were affected seasonally, but that autumn is usually a bright spot. He said part of that can be attributed to the growth of Fayetteville’s Bike, Blues & BBQ because so many hotels fill up for the event.