Supplier travel to Wal-Mart lifts local hospitality sector

story by Jamie Smith
jsmith@thecitywire.com

BENTONVILLE — As the economy improves and Wal-Mart is returning more products to its shelves, the Northwest Arkansas hospitality and travel industries are starting to feel the change.

“April 2012 is when it kicked back in,” said Bryan Rose, general manager at Simmons Suites in Bentonville. “That was the first month that business travel really kicked back in.”

Of the business travel the hotel has seen, most of it seems to be people who work for Wal-Mart suppliers that don’t have a Northwest Arkansas office, or people who are trying to develop a relationship with Wal-Mart.

“We give a lot of directions to Wal-Mart corporate (offices),” Rose said. “There’s been a tremendous upswing,” he continued. “(Companies) are less scared of the economy and they are loosening their belt on travel.”

There is a city-wide benefit when business travel increases because of the hotel taxes and the travelers also eat at local hotels and make other local purchases, he said.

A spokesperson for Wal-Mart Stores said the company does not track specifically if there is an increase across the entire company in suppliers coming to visit the Home Office because each department develops their own style of communicating with and maintaining relationships with their suppliers.

Sam Jeffery, general manager at the La Quinta Inn and Suites in Bentonville, said the number of suppliers visiting his hotel are “not back to where it was pre-economy fall in 2008, but it’s definitely gaining some traction.” Jeffery said he believes it’s the economy improving and the changes at Wal-Mart itself that are contributing to the return of the out-of-town supplier community.

Wal-Mart announced in April 2011 it was broadening its product assortment in response to customers expressing frustration when many of their favorite products disappeared from the shelves.

According to a press release issued in April 2011, Wal-Mart planned at that time to broaden its product assortment by about 8,500 items, or 11%.

“That’s brought in new business,” Jeffery said of the inventory changes. “The bad factors are going away and everything good is going on.”

Wal-Mart has added back fabrics, expanded crafting sections and sporting goods to include gun sales in addition to stocking more edible items and brands of softlines over the past year.

NUMBERS TELL
According to the STR Global report, occupancy in hotels across the regions is on the rise. This includes both business and leisure travel, both which are on an increase, said Kalene Griffith, president/CEO of the Bentonville Convention and Visitors Bureau.

The addition of Crystal Bridges Museum of American Art means more leisure travel, too.

The STR Global report says the average occupancy rate was 59% in 2006 and 53.9% in 2007. Then, the economy started to fail and so did the occupancy rates. The report says there was an 48.2% in 2008, 45.1% in 2009 and 46.5% in 2010.

Those numbers started looking better last year with a 50% occupancy rate in 2011 and 53.5% average occupancy to date in 2012.

The Bentonville A&P Commission tracks tax collections from hotels and restaurants and it appears that tax collections on hotels and meeting space is up, according to the A&P’s records.

Just this year, there has been a steady increase with $29,115 collected in January 2012 and $43,015 collected in June 2012. There was a decline in July but August’s numbers were back up to more than $42,000. In comparison, just last year the A&P recorded between $27,000 a month during the colder months up to about $43,000 in October 2011 with most months ranging in the low $30,000s.

Rogers hotels are also a popular choice for suppliers meeting with Wal-Mart. Through August of this year the hotels in Rogers collected 13.38% more tax than in the year-ago period. In February and August tax collections rose 29.13% and 23.58% respectively from the same months in 2011, according to the Rogers Visitors and Convention Bureau.

Airline travel tells a somewhat similar story, although rising fuel prices and other factors contribute to whether or not local airports such as Northwest Arkansas Regional Airport notices an increase in traffic.

Airport Director Kelly Johnson said officials are still predicting flat growth for this year despite some increases in month-to-month comparisons between years. For example, February 2012 saw about 4,000 more passengers compared to February 2011. September 2012 was also a great increase with 94,715 during the month compared to the 87,372 passengers the year before. Other months have seen a decrease, however, creating the flat year-to-date growth.

There were roughly 1.127 million total passengers recorded at XNA in 2011 compared to 1.139 million in 2010. The best year so far for XNA was 2007 with more than 1.2 million travelers flying the Northwest Arkansas skies.

MEETING ONLINE
Although there has been a noticeable increase in supplier traffic coming to Bentonville, there are also some companies finding ways to conduct business without ever leaving their office.

Jeff Clapper, executive vice president of marketing for 8th and Walton, said the company’s classes about how to be a supplier with Wal-Mart have increased in attendance.

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“Business is doing really well,” he said.

The company also offers popular online webinars as of about a year ago.

“Those have been explosive for us,” he said. “It’s a lot more affordable to sign up for a webinar than to pay for travel. Rather than have five or 10 people fly into Bentonville, we can have those same people in a webinar.”

Whether they are coming to Bentonville or connecting online, more people are expressing an interest, Clapper confirmed.

“More suppliers are coming back to Wal-Mart. Our business is up significantly in the last year and a half,” he said.

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