FAYETTEVILLE -- Local tourism officials are doing what they can with the resources they have to promote their cities when most events are canceled and people have stopped traveling for the most part.
The hope is April will represent the lowest point in lodging and hamburger tax revenue during the pandemic.
The four major cities of Northwest Arkansas all have some kind of a hotel, motel and restaurant sales tax, in addition to regular city, county and state sales taxes. However, the rates, what is taxed and what the money is used for varies.
Gov. Asa Hutchinson banned recreational travel coming into the state April 4. Occupancy at hotels, motels and vacation rentals was limited to health professionals, public safety and government employees, family members of hospital patients, journalists, people unable to return home because of the pandemic and a few others.
Hutchinson lifted the ban a month later, but required travelers from a handful of "hot spot" states at the time to quarantine for two weeks upon arrival. All restrictions on travelers were lifted June 15.
Sit-down service at bars and restaurants was halted March 20. Restaurants were allowed to resume dine-in service at one-third capacity May 11. Bars followed on May 26.
Phase II of opening happened June 15, allowing bars and restaurants to go to two-thirds capacity as set by the fire marshal.
Hotel, motel and restaurant sales tax revenue in Northwest Arkansas started dipping in March and dropped dramatically in April.
Fayetteville, Springdale, Rogers and Bentonville collected nearly $2.1 million in lodging and hamburger tax revenue from March to April last year.
This year, the cities made about $1.1 million during those two months, a 46% drop. May numbers aren't yet available.
Hotels never were instructed to close, but some did, said Montine McNulty, chief executive officer of the Arkansas Hospitality Association. Leisure travel, meaning quick stays for a weekend or a few days, among Arkansans and people from border states appears to be slowly coming back, she said.
"They are looking for outdoor activities," McNulty said. "What better state to come to than Arkansas? Our beautiful trails, our fishing, our hiking, our boating -- we have lots of outdoor activities -- and that's appealing to people."
Business travel and stays by people attending conferences or conventions likely will continue to be minimal at best for several more months, McNulty said. Many people continue to work from home if they have jobs still, and conferences and conventions just aren't happening yet, she said.
The food side seems to be picking up better, McNulty said. Restaurants offering carryout, delivery or drive-through early on got a head start in the way of heavy cleaning, keeping employees safely apart and wearing personal protective gear, she said.
Hotels and restaurants can open with safety protocols in place, but it's a matter of getting customers. That's where municipal advertising, promotion and tourism organizations can help, McNulty said.
Fayetteville's Advertising and Promotion Commission last week approved cutting more than $1.2 million from its $5.3 million budget for the year, using surplus money to cover a $734,000 shortfall. Cuts were made primarily to promotional and event-related expenses. Some employees of the city's tourism bureau, Experience Fayetteville, were laid off or furloughed.
Molly Rawn, chief executive officer of Experience Fayetteville, said the bureau still has a state-mandated purpose to promote the city despite budget cuts. Those efforts have largely turned inward, with the bureau trying to draw regional visitors and support local businesses, she said.
The Experience Fayetteville website has a list of restaurants offering curbside, delivery or drive-through service, and which ones have resumed dine-in service. The bureau also is focusing on promoting outdoor activities to tap into the leisure travel market, Rawn said.
The bureau has been encouraging organizers to postpone -- rather than cancel -- their events if possible. One event still on schedule is the Pan-American Cyclocross Championships to be held Nov. 7-8 at Centennial Park.
There's a balance between promoting events to draw visitors versus keeping people safe, Rawn said. Outdoor events such as the cyclocross championship have the most potential to be successful because they leave enough room for people to stay apart while still having fun, she said.
Initial crowd estimate for the cyclocross championship was 10,000. It's likely to be fewer because of the pandemic, Rawn said.
"If the last four months have taught us anything, it's that we can't predict the future," she said. "So we're preparing for the event as best we can."
A few events are still scheduled in Springdale around the holidays, said Bill Rogers, vice president of communications and special projects with the city's Chamber of Commerce. Events include the Burlsworth Trophy ceremony in December, Caroling on the Creek and a few others that haven't made announcements, he said. Rodeo of the Ozarks, which would have happened in June, was canceled last week.
Springdale only taxes lodging, not prepared food, and has a much smaller budget compared to Fayetteville. Last year, the tax brought in just short of $523,000 in revenue. Most of the money goes toward putting on events, Rogers said.
Chamber officials and advertising and promotion commissioners are hopeful events scheduled for the fall and winter will still go on, he said. The city contracts with the chamber to steward the lodging sales tax money through the Advertising and Promotion Commission.
Revenue for the first four months of the year is down 35% compared to the first four months of last year. Springdale received $162,436 in lodging tax revenue from January to April 2019 and so far has received $106,148 this year.
Strong returns early in the year helped with the decline in revenue once the pandemic set in, Rogers said. A few hotels closed or at least made rooms available to public safety employees seeking isolation. Revenue for April was just more than $12,000. April 2019 netted more than $53,000. As a result, spring and summer events canceled, and there isn't as much money to put toward promoting the city through its website, Explore Springdale, he said.
All hotels are back open now, he said. Springdale, like other Northwest Arkansas cities, is waiting to see when travel might resume, he said.
"We're all in the same boat, but I think we have hope it's going to get better," he said. "We need the states of Texas, Oklahoma and Missouri to have their covid positives subside so people will get in their car."
Lodging tax revenue was about the same in Rogers in April as in Springdale, even with a higher tax rate. The city charges a 3% tax on lodging, as compared to Springdale's 2%.
Rogers received just more than $13,000 this April. Last year, April brought the city more than $111,800.
Like Springdale, Rogers was heading into a strong year, said J.R. Shaw, executive director of the city's tourism bureau, Visit Rogers. Employees of the city's hotels and convention centers who have gone without work for two months have felt the real pain from the pandemic, he said. The Visit Rogers staff of four full-time employees has remained intact.
A lack of visitors has a ripple effect through a city's economy, Shaw said. With less money to put toward promotion, fewer people come to a city to spend their dollars locally, he said.
A number of hotels closed in March and April, but all have opened, he said. The city's hospitality industry relies heavily on business travel, which appears to be slowly climbing from nil, he said.
Hoteliers have been trying to entice guests with lower room rates with the shorter leisure stays that have been coming to town, Shaw said. The LPGA Championship is still scheduled for August, he said.
Still, a lack of business travel will leave a big hole in lodging tax revenue not just for the city, but the region, Shaw said.
"Until the corporate business comes back into Northwest Arkansas, we will lag behind the rest of the country in recovery," he said.
Lodging accounts for about 40% of the revenue Bentonville gains from its 2% hotel, motel and restaurant sales tax. Even though a majority of the money comes from food sales, a sudden cut in lodging has made an impact, said Kalene Griffith, chief executive officer of Visit Bentonville, the city's tourism bureau.
The city collected about $11,000 in lodging tax revenue in April, compared to more than $78,000 in April a year ago. March lodging tax revenue was about $31,000, compared to $80,000 for March in 2019.
Restaurant tax revenue has fared a little better. March and April brought about $179,500 in food tax revenue, compared to $281,790 for those two months a year ago.
Record months in overall lodging and hamburger tax revenue in January and February helped significantly, Griffith said. The Momentary contemporary art space opening in February likely had a lot to do with that, she said.
The bureau had to cut about $800,000 from its budget for this year and may have to cut more, mostly in advertising and event expenditures, Griffith said. Six of eight full-time employees were furloughed and are scheduled to come back in July, she said.
Outdoor events, such as the Outerbike and Oz Trails Off-Road festivals, are still on for October, and restaurants moving to phase II of reopening leaves some hope for an improvement in revenue, Griffith said. But the number of positive covid-19 cases in the region will continue to be a factor, she said.
"I think people have to get into a comfort zone for them to be traveling to our community, knowing that it's safe to come here," Griffith said. "We have a little bit of a challenge with the cases increasing in Northwest Arkansas."
Hotel, motel and restaurant sales taxes vary across the state:
• Fayetteville has a 2% HMR tax on lodging and prepared food sales. Half the revenue goes to tourism, the other half goes to parks.
• Springdale has a 2% tax on lodging only. The money is used to help put on and promote events that bring people to the city and pay for the Explore Springdale promotional website.
• Rogers has a 3% tax on lodging only. Revenue goes toward promotional efforts headed by Visit Rogers.
• Bentonville has a 2% HMR tax on lodging and prepared food sales. Visit Bentonville handles promotion and tourism for the city.
Source: NWA Democrat-Gazette