NWA tourism growth boosts hospitality tax revenue

story by Kim Souza
ksouza@thecitywire.com

A steady flow of tourists to scenic Northwest Arkansas has been profitable for the local hospitality sector, pushing tax revenue up 12.4% through the first nine months of this year.

Bentonville, Rogers, Springdale and Fayetteville collected a total $4.141 million in hospitality tax through September. This compared to $3.682 million collected in the same period last year.

All four cities collected a 2% tax on lodging and meeting space, while Fayetteville and Bentonville also each collect a 1% tax on prepared food.

HOTEL REPORT
In the third quarter, hotel tax revenue among the four cities rose 4.87% to just under $500,000 for the three-month period. Rogers was one city among the four to post a slight dip in third quarter hotel tax collections.

“We had an abnormally large number of groups that stayed more than 30 days, which negates them having to pay the 2% tax,” said Allyson Twiggs Dyer, executive director for the Rogers Business and Convention Bureau.

In Rogers, the third quarter taxes fell about 4% after a very tough comparison against August 2012.

“We had a number of construction workers in extended-stay facilities in excess of the 30 days, but Bikes Blues & Barbecue helped push September collections higher and October was also very strong thanks to Razorback Football and the recent craft fairs,” Twiggs-Dyer said.

Hotel operators across Northwest Arkansas have recorded venue in excess of $99.8 million through the first nine months of this year. Revenue is 12.4% over the same period last year, according to a Smith Travel Research.

The data in the STR report reflects 77% of the hotels in the region. Hotel revenue was particularly strong in the third quarter, thanks to both business and leisure travel. Total revenue reported for the quarter was $36.535 million, up 9.47% from the same period in 2012.

The room census for the recent quarter included 8,299 rooms, up 134 rooms from the same period last year.

Occupancy rates in the recent quarter ranged from 55% to 61.6%, some of the highest in seen in recent years. Through September average occupancy was 55%, that is up from 53% in 2012 and 50% in 2011. Higher occupancy rates have give hotel operators some pricing power for the first time several years. Average daily revenue per room ranged from $73.65 in July to $96.06 in September. This compared to $70.58 in July 2012 and $91.46 in September 2012.

Year-to-date average daily room rates are $80.26, compared to $78.55 a year ago and $70.41 in 2011, according to STR.

Springdale reported strong gains in hotel receipts in the third quarter as well as the nine-month period, compared to year ago. Total receipts in Springdale were $87,737, up 6.88% in the third quarter. Year-to-date receipts were $215,832, up 9.47% from the same period in 2012.

Roger Davis, general manager for the Holiday Inn Convention Center, said there is still some slight discounting for large groups, but overall revenue is growing as the rooms are filling up for longer periods of time.

Fayetteville also reported gains in the third quarter with hotel tax revenue of $81,334, up 6.25%. Most of that increase is linked to strong crowds for the Arkansas versus Texas A & M game that was played in Fayetteville this year, as well as Bikes Blues and Barbecue also a big draw to region in late September, according to city officials.

Bentonville’s hotel receipts are up about 9% with total revenue in the quarter of $151,1728.  Year-to-date hotel revenue is up 8.2%, with some $380,012 pocketed by the local Advertising and Promotion Commission.

TOURISM DRAW
“We have a good year. Business travel has always been strong here, but this year tourism groups flocking to Crystal Bridges have helped with hotel and restaurant collections. The Norman Rockwell exhibit brought 131,000 folks to Bentonville in a 90-day period, for something besides business,” said Kalene Griffith, director for Bentonville Convention and Visitors Bureau.

She said there have been between 80 and 100 bus tours in town this year in addition to a great turnout for the city’s half marathon and several additional sports tournaments over last year. Looking ahead, Griffith said the commission is just beginning work on branding itself as a tourism destination.

“With the Amazeum coming online in 2015, we have a great deal to look forward to. The Razorback Greenway will also be an important assets for all the cities on the route to develop events around the trail system.

Each of the cities said their 2013 budgets are in good shape this year, and they have already planned for a 3% to 4% increase next year because of the convention’s booked. Twiggs-Dyer said in late January the state’s municipal league will hold its convention in Rogers and the governor’s annual tourism conference will also be held there in March.

“We don’t have any data about how many out-of-towners used the new water park in Rogers this past summer. We know it was full most everyday it was open, but this coming year, we have put a system in place to track where the guests are from by zip code,” she said.

FOOD TAXES
As noted Bentonville and Fayetteville each collect a prepared food tax of 1% of sales. The food tax collected in Bentonville this year is up 8.2% to $843,433 through the month of September.

Griffith said the extra traffic in town, rising population and several new restaurants are helping to fuel that increase. Bentonville is gaining a reputation for its diverse restaurant offerings from Indian cuisine, to French bistro, gourmet selections at 21c and local favorites like Flying Fish and the Station Cafe, all which are within walking distance of downtown.

“We are very excited about Chipolte Grill and Cracker Barrel which are coming to Bentonville early next year. These are going to be located just off I-540, giving the city more options out that way,” Griffith said.

In Fayetteville, food tax collections total $1.944 million through the first nine months of this year, up 12% from a year ago. In the recent quarter Apple Blossom Brewing company opened as well as K.J.Sushi and Korean Barbecue. Another dozen or so restaurants were closed for failure to pay taxes.

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Hospitality Revenue (January through September)
Bentonville
2013: $1.223 million
2012: $1.101 million
11.08%

Rogers
2013: $524,283
2012: $513,773
2.5%

Springdale
2013: $236,290
2012: $215,832
9.47%

Fayetteville
2013: $2.157 million
2012: $1.851 million
16.5%

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