Northwest Arkansas hotel, restaurant tax receipts rise in 2013

story by Kim Souza
ksouza@thecitywire.com

The four largest Northwest Arkansas cities reported solid 6% gains in their fourth quarter hospitality tax receipts, compared to the prior year. Fayetteville, Rogers, Springdale and Bentonville collected $1.31 million in hotel and food taxes during the months of October, November and December. This is compared to $1.235 million collected in the same quarter of 2012.

While October and November were strong months, inclement weather has since prompted cancellations and lackluster traffic among business and leisure travelers, said Roger Davis, general manager of the Springdale Holiday and Convention Center.

Davis said 2013 was a very good year as his hotel revenue rose 25% from strong group travel and through the first nine months of last year. The four cities reported $5.32 million collected in hospitality taxes for the full year, up from the $4.99 million during 2012.

Each of the cities in this report collect a 2% tax on lodging and meeting space, while Fayetteville and Bentonville also each collect a 1% tax on prepared food.

POSITIVE ANNUAL RESULTS
For the year, collections were up 11.4% in Bentonville, up 4.4% in Fayetteville, up 2.21% in Rogers and up 8.53% in Springdale. Following are the annual comparisons for each city.
Hospitality Revenue (January through December)
• Bentonville
2013: $1.672 million
2012: $1.5 million
11.4%

• Springdale
2013: $338,302
2012: $311,710
8.53%

• Fayetteville
2013: $2.633 million
2012: $2.522 million
4.4%

• Rogers
2013: $680,077
2012: $665,358
2.21%

FOURTH QUARTER RESULTS
In the fourth quarter, Springdale hotel taxes receipts totaled $102,012, up 6.39% from the last year’s period.

Bentonville reported an 11.8% uptick its fourth quarter hospitality receipts, collecting $409,409, compared to $365,934 reported a year earlier. While hotel taxes rose 8.96% in Bentonville, it was the food tax increase of 18.8% that really made the difference the fourth quarter gains from a year ago.

“We continue to hear good reports from our restaurants and look forward to three new venues on tap in the coming months — Cracker Barrel, Chipotle Grill and Joe’s Italian,” said Kalene Griffith, executive director for the Bentonville Visitors and Convention Bureau.

Fayetteville reported $643,996 in hospitality receipts — food and hotel taxes collected — in the last quarter of 2013. The hospitality revenue increased about 1.37% from the same time in 2012.

Marilyn Heifner, executive director for the Fayetteville A&P Commission, said November was strong month in the quarter with hotel and restaurant taxes rising 10% from the year before. She said meetings and conventions in November had an economic impact of $302,649. Definite bookings in November had an economic impact of $4.884 million in value, she noted in the January commission meeting minutes.

Rogers collected $154,915 in hotel taxes in the fourth quarter, with four hotels not yet paid through December. Allyson Dyer, executive director for Visit Rogers, said fourth quarter results are up 2.19% from the record numbers posted last year.

Dyer said after strong October and November results, winter weather in December and January hindered corporate business travel, which is a big part of the city’s hotel bookings this time of year.

STR REPORT
Hotel operators across Northwest Arkansas have recorded revenue in excess of $128.564 million during 2013. Revenue rose 10.7% over 2012, 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 and the month of October, thanks to business and leisure travel, but revenue flattened out in November and December, in part from inclement weather throughout much of the country.

The room census for the fourth quarter included 8,269 rooms, up 104 rooms from the same period last year. Occupancy rates in the fourth quarter averaged 45.86%, down slightly from the year-ago period. The full year occupancy rates averaged 52.7%, up from 51.4% and 49.9% in the two prior years.

Higher occupancy rates have give hotel operators some pricing power for the first time several years. Average daily revenue per room was $81.08 in the fourth quarter, up 4.5% from the same period in 2012. STR reports room revenue averaged $80.68 for the full year, compared to $76.93 in 2012.

Dyer said she is happy with the 2% to 3% gains Rogers posted in 2013, after banner gains in 2012.

“We continue to have an abnormally large number of groups that stay more than 30 days, which negates them having to pay the 2% tax,” said Dyer.

Griffith said the 21c Museum Hotel in downtown Bentonville helped hoist the city’s 2013 hotel tax collections 18% for the full year, when compared to 2012. She said the 21c has been a popular choice for meeting and lodging space as it made up 12% of the city’s 2013 hotel tax collections.

2014 OUTLOOK
Davis said there are two new hotels coming online this year, the Sheraton Four Points to be located in the former Clarion space in Bentonville, and a new $12 million Hilton Garden Inn near Interstate 540 exit 64 and Wedington Drive in west Fayetteville.

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“There is still an excess room capacity in this market and both of these hotels will also add meeting space — 20,000 square feet combined estimate. Right now 2014 is off to a very slow start, but we expect when the weather clears that leisure and corporate business travel will pick back up. Even so, these two new venues will add to the excess room capacity,” Davis said.

The Hilton Garden Inn will have 115 rooms and the Sheraton Four Points will have 105 rooms. Both venues are expected to open later this year.

Griffith said this weekend 29 NCAA softball teams will be in town for the Bentonville Classic. 

“This is a great draw for our hotel and restaurants as the number of teams has grown from 13 to 29. We are looking forward to the warmer weather so our local residents can come out and watch these games as well,” Griffith said.

Dyer and Davis each said they expect traffic to pick up in the spring as they have had groups recently reschedule their travel for later in the year.

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