Tourist Tax Revenues Rebound in ’10

Even after absorbing a small – and not all that surprising – dip in 2009, increased tax collection revenues show tourism continues to be a growing industry in Northwest Arkansas.

From 2005 through 2009, in the six-county region of Benton, Carroll, Crawford, Madison, Sebastian and Washington counties, tourism-tax collections grew 14.4 percent to $3 million. That reflects spending of $150.2 million in Northwest Arkansas in 2009.

Figures from 2010 were only complete through the month of November, but $2.82 million in tourism-tax collections for those 11 months indicate a pace to equal or exceed the previous year’s total.

Those tourism-tax revenues from 2010 also indicate total spending of $141 million in the six counties, which is more than a quarter (26 percent) of the statewide total of $554.3 million spent on tourism-related business in those 11 months.

The figures are compiled by the Arkansas Department of Parks and Tourism. They reflect the totals from a 2 percent sales tax collected on tourism-related business including lodging, theme parks, marinas and camping.

Following several years of increased growth, tourism-tax collection revenues took a slight hit in 2009, coincidentally the year when headlines were dominated by the collapse of the stock market and the shaky foundation of the nation’s financial system. That led to consumers being more cautious about where and how they spent their money.

As a result, tourism-tax collections decreased by 2.7 percent in Northwest Arkansas.

Looking at the five years as a whole, however, paints a more positive picture according to Joe David Rice, the tourism director for the Arkansas Department of Parks and Tourism.

Revenue increases during 2010 also indicate a turn in the right direction.

“2009 was not [a year] to remember, at least in positive terms,” Rice said. “But the last six months of 2010 seemingly were looking better. I think we had finally admitted we had been in a recession and that it was over. I think just as easily as we can talk ourselves into a recession, we can talk ourselves out of a recession. Some consumer confidence has been restored.”

Rice also noted that several surrounding areas he identified as “feeder areas” to Arkansas’s travel and tourism industry never suffered the real out-and-out economic devastation that other areas of the country had to face. That aided the recovery in 2010 and should continue to do so this year.

“Oklahoma City, Tulsa, Dallas, Houston … those areas are in pretty good shape,” Rice said. “That is another advantage that is working in our favor.

“We’re looking for a strong 2011. I don’t think it’s going to be a knock-your-socks-off kind of year, but the American psyche is stronger.”

Rice also said he is anticipating the opening of Crystal Bridges Museum of American Art in Bentonville, which is scheduled to open to the public on November 11, 2011. That should only help Benton County’s tourism-tax collections.

“There’s really a lot of buzz about that out there,” he said.

Crawford County, with Van Buren as its county seat, was up 52.3 percent, easily making it the biggest mover in Northwest Arkansas. Crawford County’s tourism-tax collections were $120,553 in 2009, indicating that people spent $6.01 million in that county on the four tourism-related businesses mentioned above.

Maryl Koeth, the executive director of Van Buren’s Advertising & Promotion Commission, said a combination of things factor into the county’s increase in tourism-tax collections, including an increase in hotels, more attractions and a more aggressive push to host youth sports tournaments, which draw not only players and coaches to the area but also a varying number of family members and friends.

Rice agreed with the push for youth sports tournaments in several counties and tied their increased frequency to increased tourism-tax revenue.

“Those can be like mini-family reunions,” he added.

Koeth said that it’s no secret that by adding attractions, you add consumers to the area who will “come here, spend their money and go back home.”

One thing she noted that draws tourists from several states to Crawford County are excursion rides offered on antique trains.

“The more you have to offer, the more you have to put back into the community,” she said. “Most people don’t think of tourism the same way they do other economic development areas like industrial or retail, but it’s absolutely no different.”

Koeth said her office has a budget of $509,000 for 2011. Because of Van Buren’s location along Interstate 40, they do quite a bit of billboard advertising.

“We see that it works, anecdotally,” she said. “We hear from people who see (a billboard ad) and tell us they decided to stop off.”

Benton County was up 22 percent in its tourism-tax collections from $863,739 in 2005 to $1.05 million in 2009. That figure was also the dollar leader, indicating that people in Benton County spent $52.7 million on the four businesses that apply to the tourism tax.

The tourism-tax collections in Benton County have always been somewhat difficult to pin down to tourism. Much of the total comes from hotel dollars, and many of the visitors to Benton County are vendors hoping to do business with Wal-Mart, which would classify them as business travelers.

Brandon Garcia, the front office manager at the Doubletree Suites by Hilton Hotel in Bentonville, said from his perspective, if he had to put a percentage to it, 80 percent of the lodgers at the Doubletree are in town on corporate business.

“And 70 percent of those are tied directly to Wal-Mart,” he said.

Kalene Griffith would agree with that estimate. Griffith, in her fifth year as president and CEO of the Bentonville & Visitors Bureau, said her office has tried to close the gap between the crush of weekday business travelers and weekend leisure travelers.

Griffith identified a few niche markets to initiate more weekend travel to the area, specifically sports competitions, group tours and small meetings.

Griffith said the focus for her office this upcoming year is aimed in one direction – preparing for the grand opening of Crystal Bridges. The completion of Phase I of the renovation to the Sam Walton’s Five & Dime Walmart Visitor Center – slated for the spring – is also noteworthy, she said.

“With the economic development that we have going on with Crystal Bridges and the five and dime, we continue to see people come into the area,” she said.

Washington County saw a five-year increase of 9.07 percent, up to $845,948 in tourism-tax collection through the end of 2009. People spent $42.3 million there on the four tourism-related businesses in 2009.

Washington County actually saw an increase in 2009 in its tourism-tax revenue, up almost $70,500 from 2008.

Marilyn Heifner, in her 18th year as executive director of the Fayetteville Advertising and Promotions Commission, said her office took a different approach in 2009 when they saw declining numbers. They targeted travelers who were seeking weekend, or short-term, trips to the area. “We realized we weren’t going to get that week-long traveler that was going to be here for a while,” she said. “But we focused on getting others from, say, Tulsa who were just a short drive away. That’s what we looked for. It has certainly paid off.”

Bikes, Blues and BBQ, which attracts hundreds of thousands of visitors to Fayetteville and Northwest Arkansas, will always be a major breadwinner in Washington County when it comes to tourism dollars. “And you can’t deny the University,” Heifner added, referring to the Arkansas Razorbacks. “And when the teams are doing well the tourism is always a whole lot better. It (tourism) is not necessarily dependant on that but you can’t deny the impact.”

Heifner noted the Clinton House Museum and the expansion of the Arkansas Air Museum at Drake Field as added attractions. She also said the Fayetteville Convention and Visitors Bureau is making a push to attract more sporting events and group tours to the area.

“We’re doing more group tours than we have done in the past,” she said.

Carroll County saw an increase of 8.4 percent from 2005 through 2009. Like Washington County, Carroll County also bucked the prevailing trend and saw a spike in 2009 when it collected $606,954 in tourism-tax revenue, up almost $90,000 from 2008.

Only Madison County saw a decrease from 2005 through the end of 2009, falling from $3,358 to $2,928, a loss of 12.1 percent.