Art Feeds Local Economy

Beauty, it’s said, is in the eye of the beholder.

So, too, might be the economic impact created thus far in Benton County by Crystal Bridges Museum of American Art.

The Bentonville Convention and Visitors Bureau has touted year-over-year increases in hotel and restaurant tax collections for both November and December, purportedly a result of people visiting the museum. Hotel tax collections are up in Rogers, too, and positive ripple effects have been felt as far away as Eureka Springs.

Determining just how much of the increased activity is directly due to the opening of Crystal Bridges, however, is an inexact science. Hoteliers, restaurateurs and city officials alike agree on that much.

Some of the increases in tax collections are eye-popping, though, and Bentonville CVB president and CEO Kalene Griffith said at least one number is inarguable. Most projections for first-year visitors to Crystal Bridges ranged from 150,000 to 300,000, and as of Feb. 13 — essentially three months since its grand opening — the museum had hosted 144,296, according to director of communications Laura Jacobs.

“What I can say is, based on that number, we’ve well surpassed our expected numbers of visitors so far,” Griffith said. “We’re ecstatic with the number of people coming into the area.”

And when that many people come into an area, all parties agreed, they bring disposable income with them.

“It’s definitely been a big plus,” said Nancy Morgan, director of sales at Bentonville’s Hilton Garden Inn.

 

Food for Thought

The Bentonville Advertising & Promotion Commission’s restaurant tax collection, in particular, showed dramatic year-over-year jumps during the last two months of 2011. The bureau collects a 1 percent tax from city restaurants and other sellers of prepared food, but for the purposes of this article, the Northwest Arkansas Business Journal excluded some entities.

Those intentionally omitted included Wal-Mart Stores Inc. company cafeterias and in-store delis, other grocery store delis, catering companies, convenience stores where identifiable, and the Northwest Arkansas Community College food court. The idea was to get a reflection of revenue generated by restaurants where Crystal Bridges visitors might eat.

Using that method, Bentonville restaurants produced revenue of about $6.56 million in November 2011, an increase of more than 17 percent over the $5.57 million made in November 2010. In December 2011, Bentonville restaurants had revenue of about $6.93 million, a year-over-year jump of more than 16 percent.

Few, if any, restaurants showed a bigger spike than River Grille Steakhouse. According to the A&P collections, River Grille had November 2010 revenue of $54,400 and December 2010 revenue of $82,700. Totals for the same months in 2011 were $76,000 and $91,000, respectively.

Managing partner Brenda Swango said December always is a good month for the restaurant due to holiday parties, but the November spike undoubtedly was a result of Crystal Bridges. She based that idea not on any form of organized polling, but feedback from customers.

“You’d be amazed at how many people will offer it up and tell you they’re here for Crystal Bridges,” Swango said with a laugh, “because they’re so excited.

“They might want to know if you’ve been there, or they’re excited because they just came from there or are planning to go the next day or whatever. It’s been fun.”

Like many of her counterparts, Swango has made efforts to cultivate a relationship with Crystal Bridges similar to the one she has with many area hotels. River Grille’s proximity to Courtyard by Marriott and Simmons Suites has been beneficial in attracting museum visitors to the restaurant, she said, as all three are within a mile of the museum.

Now Swango hopes to strengthen her relationships with hotels beyond Bentonville’s borders while also providing museumgoers the same food and service that’s made River Grille popular among business travelers.

“This is all new for us as far as this being a destination and people coming here as tourists,” Swango said. “It’s definitely different for us to have that kind of traveler.”

 

Expanded Menu

Established restaurants like River Grille aren’t the only ones trying to cash in on the presence of Crystal Bridges. Numerous new restaurants popped up on and around the downtown square in anticipation of the museum’s opening.

Tavola Trattoria, Tusk & Trotter and The Pressroom are just a few examples. All three opened in 2011, thus adding new tax streams to the A&P well.

Griffith said the opening and closing of restaurants is simply part of the nature of the industry, but did acknowledge the new eateries contributed to the increase in tax collections. Determining how much of their success has been due to Crystal Bridges, however, is a tougher task.

That makes the year-over-year comparisons somewhat flawed.

“You can’t compare apples to apples … but I also think the number of people coming into the city is increasing those tax numbers even more,” Griffith said.

One restaurant that’s undoubtedly helped fuel the jump is Eleven, the restaurant located at Crystal Bridges. Per A&P collections, Eleven generated more than $250,000 in revenue in November and December, though that includes sales from the museum’s coffee shop and catering division.

Case Dighero, director of culinary, said his group is “pretty fiscally motivated.”

“We’re expected to show a profit,” he added.

So far, that hasn’t been a problem. Dighero said his profit margin has been “about three times what I expected.” He also said more than 40 percent of visitors have spent money on food and/or beverages.

Eleven provides walk-up lunch service from 11 a.m.-3 p.m. each day the museum is open, and Dighero said the three most popular items thus far cost less than $10. There are plans to add some of those items to the dinner menu, he added.

The restaurant serves dinner from 5-9 p.m. on Wednesdays and Fridays. And while the perception might be the dinner menu has steep prices, Dighero said that’s not necessarily the case.

Instead, he said, Eleven was designed to have the same wide appeal as the art at Crystal Bridges.

“We want to reflect the museum,” Dighero said. “Whether it’s an international art collector from Europe or a chicken farmer from Harrison, there’s something for everybody.”

 

‘Wonderful Byproduct’                  

Sales inside the museum aren’t the only way to measure Crystal Bridges’ impact on the area’s economy. Dighero said he uses local products — ranging from breads and cheeses to pastas and grits — when possible.

Bentonville/Bella Vista Chamber of Commerce president and CEO Ed Clifford said 123 retail and restaurant jobs have been created in downtown Bentonville largely as a result of the museum.

“They wouldn’t be there if Crystal Bridges wasn’t here, and if the Walmart Visitor Center hadn’t expanded the way it did.”

Eureka Springs A&P executive director Mike Maloney said his city also has felt a ripple in revenue due to Crystal Bridges. The city generated $1.1 million in collections via its 3 percent tax on hotels and restaurants within the city limits in 2011, he said, despite spending about $200,000 less on advertising than had been planned.

Maloney said favorable weather and re-directed ad strategies played a big part in that, but anecdotal evidence shows Crystal Bridges was a factor, too.

“If we took Crystal Bridges out of the equation, I don’t know where we’d be,” Maloney said, “but I do know I’m glad it’s there.”

Benton County hotels also appear to have benefited from the museum’s opening. Bentonville’s A&P collections were up 27.9 percent from $2.83 million in November 2010 to $3.62 million in November 2011, and 0.9 percent from $2.24 million in December 2010 to $2.26 million in December 2011.

The December increase came despite the closings of the Clarion Inn and Convention Center and the Sleep Inn.

Rogers hotels, meanwhile, saw a 28.3 percent jump in year-over-year revenue for November, and a 4.7 percent year-over-year increase in December.

But while Morgan, of the Hilton Garden Inn, credited some of its 32.8 percent jump in November revenue to Crystal Bridges, she said December’s smaller gain (19.3 percent) probably was due more to increased business travel.

Perhaps even more than restaurant operators, hotel managers seem to have a hard time determining the precise impact Crystal Bridges is having on bottom lines.

“We really don’t know,” Morgan said.

More time and data ultimately will paint a more accurate picture of the museum’s economic impact on Benton County and the rest of Northwest Arkansas. Until then, city officials and business owners and operators might have to settle for Jacobs’ assessment.

“We’re not here to create economic impact,” she said, “but it is a wonderful byproduct.”