FAYETTEVILLE — Spending in Fayetteville is down. The city has the sales tax statistics to prove the slump.
But if tourism taxes are any indication, bars and restaurants are doing well. Fayetteville’s 2 percent tax levied on hotels, restaurants and bar activity is holding steady and is at the same amount it was last year at this time, according to state tax reports.
City sales tax collection is down 7 percent overall for the first nine months of 2009, compared with the same period in 2008, according city finance documents.
Observers caution against any conclusion that has Fayetteville riding a wave of food and drink while skimping on needed car repair or clothes for the kids. In a recession, every purchased gets scrutinized. But even in a soft economy, consumers are still not willing to cancel a Razorback football game trip.
“People are still taking their vacations and paying for hotel rooms, food and drink but are not spending their money on retail,” said T.J. Angeleno, general manager for the Courtyard Marriott in Fayetteville.
Other factors may also have an impact. For example, toward the end of last year many restaurants increased prices.
“Number of customers may be down, but the cost of eating out has risen,” said Marilyn Heifner, director of the Fayetteville Advertising and Promotion Commission. “This might account for the sameness in collections.”
Angeleno credits an increase in the number of restaurants in Fayetteville and willingness to eat closer to home as another reason tax collection is holding steady.
“I think you’ll come to find that restaurants are definitely feeling the impact of a down economy. However, I think you have more inventory in Fayetteville,” Angeleno said. “If you take a look at the number of restaurants that have opened over the past year — including one hotel — I think more revenue and tax revenue is being generated because people do not have to travel into surrounding areas.”
By comparison, Springdale’s hotel and motel taxes are down 17 percent compared to the same time last year. Springdale’s tourism tax, however, does not apply to bars or restaurants.