Editor’s note: This story is a component of The Compass Report. The quarterly Compass Report is managed by The City Wire, and sponsored by Arvest Bank in the Fort Smith region. Supporting sponsors of The Compass Report are Cox Communications and the Fort Smith Regional Chamber of Commerce.
Hospitality tax collections are off to a mixed start in the Fort Smith region, but revenue from Arkansas’ 2% tourism tax is off to a record start following a record finish in 2014. The region also saw a dip in tourism industry employment to begin 2015.
Tax revenue from hotel and restaurant activity in Van Buren for the first two months of the year total $64,409, down from the $66,111 during the same period in 2014. The city collects a 1% tax on lodging and a 1% prepared food tax.
Fewer people eating in Van Buren restaurants pushed the numbers lower. Revenue from the prepared food tax in January and February was $56,381, down 3.36% compared to the same period in 2014. Lodging tax revenue was $8,027 in the first two months, up 3.31% compared to the same period in 2014.
Hospitality tax collections in Van Buren during 2014 totaled $430,278, up 1.4% compared to the same period in 2013.
Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission, said the numbers are still on target with what was budgeted.
“Our 2015 tax revenue is about where we projected it would be. January numbers were down slightly, but there were several accounts that were slow to pay in January and those have corrected in February and so far for March,” Koeth said.
She also said the loss of Motel 6 may initially lower collections, but expects Spring events to make up the difference.
“We will see a slight dip in lodging numbers with the loss of the Motel 6. I anticipate that drop to be very slight. Factoring in the winter weather in late January and February restaurant numbers will still show an increase over last year. Helping boost the numbers for this spring are special events in April and May. All in all we are on target so far for 2015,” Koeth told The City Wire.
Hospitality tax collections in Fort Smith for the first two months of the year total $114,836, up 4.07% compared to the same period in 2014. The Fort Smith Convention & Visitors Bureau collected $761,826 in 2014, up 4.2% compared to 2013. The city collects a 3% tax on lodging.
Claude Legris, executive director of the Fort Smith Convention and Visitors Bureau, said the tax revenue gain is a product of higher hotel occupancy rather than higher hotel rates.
“Citywide occupancy was up 7.5% in January and 8.5% in February but Average Daily Rate was flat in January (+0.6%) and actually down (-0.5%) in February so increases were really a result of the increase in occupancy,” Legris said. “Preliminary reports for March indicate that overall the first quarter will be better than that period in 2014.”
Employment in the region’s tourism industry was 8,700 during March, unchanged compared to February and below the 9,000 in March 2014. The sector reached 2014 employment highs of 9,300 in May, June and August. The numbers were recently revised by the U.S. Bureau of Labor Statistics. That revision lowered the top monthly 2014 employment in the sector from 9,900 to 9,300. The peak employment for the sector is 9,400 which was first reached in June 2007.
Collections of Arkansas’ 2% tourism tax in January totaled $833,448, up 5.89% compared to January 2014 and a new record for January collections. Collections of the tax in 2014 totaled $13.677 million, up 7.48% compared to the $12.716 million collected in 2013. The 2014 tally set a new record for the tax. Following are the past five years of 2% tax collections.
2014: $13.677 million
2013: $12.716 million
2012: $12.404 million
2011: $12.025 million
2010: $11.492 million
FORT SMITH HOSPITALITY TAX COLLECTIONS
2014: $761,826
2013: $731,057
2012: $746,182
2011: $708,141
2010: $678,934
VAN BUREN HOSPITALITY TAX COLLECTIONS
2014: $430,278
2013: $423,221
2012: $425,554
2011: $429,561
2010: $395,195