Editor’s note: This story is a component of The Compass Report. The quarterly Compass Report is managed by The City Wire and presented by Fort Smith-based Benefit Bank. Other supporting sponsors of The Compass Report are Cox Communications and the Fort Smith Regional Chamber of Commerce.
With earnings reports from major U.S. retailers indicating a slowdown in discretionary spending, it’s not a surprise to see declines in hospitality tax collections in the Fort Smith and Van Buren areas.
Collections in Van Buren during the first six months of 2013 total $213,288, a slight decline of 0.3% from the $212,704 in the same period of 2012. June collections in Van Buren were $36,523, just slightly below the $36,527 in June 2012. The city collects a 1% tax on lodging and a 1% prepared food tax.
Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission, continues to believe that vacation and business travelers are spending less – fewer nights in hotels, fewer restaurant visits, etc. – while on vacation or business trips. The concern is that the trend will begin to result in a growing year-over-year decline.
“As you can see, the June 2013 tax receipts were even with last year's numbers. I'm hoping to see this trend continue through the end of the year,” Koeth said.
During 2012, Van Buren hospitality tax collections totaled $425,554, up 5.2% compared to the 2011 collections. Hospitality tax collections in Van Buren during 2011 totaled $429,561, up 2.34% compared to 2010. The 2011 collections ended a two-year skid in Van Buren.
FORT SMITH NUMBERS
Collections in Fort Smith during the first half of 2013 totals $370,590, down 3.9% compared to the same period in 2012. June collections were $68,552, down 8.5% compared to June 2012. The city collects a 3% tax on lodging.
“Last year we hosted one Jehovah’s Witnesses conference in June and two in July. The lack of hosting that conference, as well as the United Methodist Church event resulted in lower occupancy for June of this year,” said Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau. “Looking ahead to July, we had a solid month of events with two Jehovah Witnesses events (they held two large vents this year instead of three), with the Arkansas Sheriff’s Association in between. Following the second Jehovah Witnesses conference this year we hosted the 12th District African Methodist Episcopal church Youth Conference, so I expect to see this year’s July collections compare favorably with 2012, helping us to make up some of the ground on the year to date figure.”
During 2012, Fort Smith hospitality tax collections totaled $746,182, up 5.37% compared to the 2011 period.
Employment in the region’s tourism industry was 9,600 during June, up from 9,400 in May and above the 9,200 in June 2012. The sector reached an employment high of 9,800 in August 2008. The monthly average employment in 2012 was 9,000, higher than the 8,800 in 2011 and 8,700 in 2010. However, employment averages peaked in 2007, 2008 and 2009 at 9,300.
STATE, NATIONAL DATA
Arkansas’ tourism sector (leisure & hospitality) employed 102,500 during June, up from the 102,300 during May and slightly less than the 102,600 during June 2012. At a revised 103,700, January 2013 marked a new employment high in the sector.
Arkansas’ 2% tourism tax receipts totaled $4.954 million for the first five months of 2013, up 2.58% compared to the same period in 2012. The increase is a shift from a year-over-year decline of 0.11% during the first quarter of 2013.
Arkansas’ 2% tourism tax receipts totaled $12.405 million during 2012, up 3.16% compared to the $12.025 million during 2011. The gains marked the third consecutive year of improving tourism tax revenue.
The June STR report posted at HotelNewsNow.com shows a slight decrease nationally in hotel demand.
The U.S. hotel industry’s occupancy fell 0.3% to 69.9%, and the average daily rate was up 3.3% to $111.27. The evenue per available room increased 3% to $77.76.
“The hotel industry reported the highest monthly room revenue ever in June (US$11.5 billion), a clear indicator that the U.S. hotel industry is healthy and that most benchmark metrics are recovering to their old highs,” Jan Freitag, senior VP of strategic development at STR, said in this report. “With that said, demand only increased 0.5 percent in year-over-year comparisons, and RevPAR only increased 3 percent.”