State tourism experiences an economic rebound

LITTLE ROCK – Arkansas’ tourism industry is recovering from the devastating impact of the COVID-19 pandemic.

Based on collections of the 2% state tourism tax, the industry is now surpassing pre-pandemic levels of economic activity. However, other tourism indicators point to fewer people working in Arkansas hotels than in 2019.

The 2% tourist tax is levied when people rent hotel rooms, condominiums, lodges, car lots, and other accommodations. It is also levied on camping fees and boat rentals. It is added to the price of tourist attractions.

In 2021, the state collected $20.5 million from the tax, which was a record. In 2020, when the tourism industry was impacted by restrictions due to the COVID-19 pandemic, tourist tax collections amounted to $13.6 million. It was the lowest since 2013.

Revenue from the tourist tax finances the State’s marketing budget.

According to the director of the state’s tourism department, Arkansas has weathered the pandemic better than other states competing for tourists. One reason is that Arkansas quickly stopped marketing in other states, so it wouldn’t waste money on ad campaigns when people weren’t traveling.

Tourists and visitors to Arkansas spent about $6 billion in 2020, up from about $8 billion in 2019.

The State Tourism Ticker is sponsored by the Arkansas Hospitality Association and operated by the Talk Business & Politics news gathering website. The ticker measures the health of the tourism industry using three categories. One is hospitality tax revenue collected by 17 cities and towns in Arkansas. Another is income from the 2% state tourist tax. The third category includes employment figures compiled by the federal Bureau of Labor Statistics.

Employment statistics indicate that Arkansas has not fully recovered from the pandemic. For the first ten months of 2021, the average number of jobs in the tourism sector was around 111,500. This is better than in 2020, when the average was 103,650, but it is still below 2019, where the average number of jobs in tourism was 122,900.

Northwest Arkansas is the only region in the state that has seen job growth in the tourism sector above pre-pandemic levels. In 2019, the average number of tourism-related jobs in the region was 26,000. It’s not 26,500.

Many cities levy an advertising and promotion tax or hospitality tax. Sometimes it is colloquially referred to as a “burger tax”.

In the first ten months of 2021, hospitality taxes in 17 Arkansas cities are up more than 30% from 2020. They are up 5.6% from 2019.

In total, the 17 cities collected $47.8 million in hospitality taxes in the first ten months of 2021. Of this amount, restaurant taxes, also known as prepared food taxes, accounted for approximately $36. $5 million, compared to $33 million collected in the same period of 2019.

The tourism department has adapted its marketing strategy in response to the pandemic. Previously, the state tourism magazine, which is digital, was titled “Discover Arkansas.”

Recognizing that long-distance travel was hardest hit by the pandemic, the department changed the magazine’s title to “Rediscovering Arkansas.” It changes the target audience of Arkansas residents and urges them to know the tourist destinations near them.

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