EUREKA SPRINGS — Eureka Springs, one of the state’s top weekend getaway destinations, is hoping to shed its reputation as a tourist town that closes its doors and shutters its windows with the first snowfall.
For several years, the Eureka Springs City Advertising and Promotion Commission has been focusing its advertising money on regional tourism. The commission, which administers a 3 percent tax on restaurants and lodging in the city, is responsible for using that revenue to promote the area.
Mike Maloney, executive director of the commission, points to gradually rising sales-tax receipts during recent winter months as a sign that the commission’s efforts are starting to pay off.
Maloney said when he first arrived at the commission in 2011, it wasn’t advertising in the months leading into winter.
“The typical modus operandi was, ‘Don’t spend any money until April,’” Maloney said. “They just weren’t putting any money into the system.”
But Maloney said that in 2011, the commission quintupled its annual spending on television advertising to $250,000, focusing on specific markets that staff members thought would attract tourist dollars to the city.
“That had a very direct impact on what people were seeing,” Maloney said. “We started branching out into markets that hadn’t seen us before. Kansas City, Tulsa, Oklahoma City. We started being on the air 12 months out of the year.”
Maloney said the commission also targeted people closer to home, concentrating on cities along Interstate 540, where people were more likely to make spontaneous day trips to the city.
“What we found out through survey data was that of the people of Bentonor Washington counties, 75 percent had never been here for any considerable amount of time,” Maloney said. “Why not go after 400,000 people who are only 40 minutes away? That was so simple.”
Maloney said the commission’s annual advertising budget was about $600,000, out of a total operation budget of about $1.2 million.
Consumer spending in Eureka Springs is typically measured by proceeds from the restaurant and lodging tax, and from the state’s 6 percent sales tax on all goods and services.
According to data from the Arkansas Department of Finance and Administration, annual gross sales tax revenue for Eureka Springs has remained generally steady over the past 10 years, ranging from a peak of $2.09 million in 2002 to a low of $1.93 million in 2007. The state collected $2,038,733 in sales taxes in the city in 2012.
While November is traditionally the city’s strongest month in terms of sales tax revenue, November through February of 2011-12 showed strong gains over the same period the previous year.
Not everyone is convinced that the city’s modest overall upswing in winter visits and sales is due to stepped-up advertising.
John Cross, chairman of the Cornerstone Bank in Eureka Springs, said unseasonably mild winters are the main reason.
“We had a $40,000 increase in tax revenue last year,” Cross said. “I’m sure the CAPC would like to take credit for every dime of it. But, I’m sorry to say, winter business, read my lips, is solely dependent on the weather in Eureka Springs.”
Cross has consistently criticized the direction the Eureka Springs City Council and promotions commission has taken on a number of issues, including the city’s 1995 decision to fire the Woods Brothers Advertising Agency (now part of the Cranford Johnson Robinson Woods advertising agency, based in Little Rock), and the commission’s subsequent efforts to increasingly conduct the city’s advertising in-house.
“We’re the only professional tourism town in America that doesn’t have a professional tourism ad agency,” Cross said. “I think the CAPC thinks they can do it themselves. But marketing today is highly specialized, highly technical, it’s changing constantly, and it involves great research. So even if we had the expertise on the CAPC board, we don’t have the staff to go out and do the things.”
Maloney conceded that the winter weather has worked in the city’s favor but rejected the idea that the revenue increases were only because of the weather.
“Mild winters didn’t hurt anything,” Maloney said. “But over the last eight to nine years, the city flat lined. In 2011, we brought the city’s income up by being extremely aggressive. In 2012, we added 9.6 percent to the coffers. That’s not just because the weather was warm. We brought more people to town.”
According to data provided by the commission, annual tourism-related tax revenue remained around $1 million each year until 2012. The city saw a 9.6 percent increase in revenue from $1,089,753 in 2011 to more than $1,194,000 in 2012.
But regardless of whether the revenue increase is seasonal, Eureka Springs is still very much a town of “seasonal hours.” Many of its unique shops and eateries are momand-pop operations, run by family members in the slower months, and with few “open” signs in store windows on winter weekends and holidays.
Jacqueline Wolven, a member of the Eureka Springs Downtown Network, said the addition of several national chain store franchises has helped change that attitude a bit. She pointed to gift shops such as Romancing the Stone and Bath Junkie that set their hours of operation in accordance with their respective corporate charters.
“Those older stores, they’rechanging their mindsets,” Wolven said. “They’re seeing that they could stay open.”
Bill Ott, director of marketing and communications for two of Eureka Springs best-known hotels - the 1886 Crescent Hotel and Spa and the 1905 Basin Park Hotel - said that when the hotels were purchased in 1997 by Marty and Elise Roenigk, they immediately changed to year-round establishments, rather than closing during the winter. That not only provided additional revenue for those months, Ott said, it also allowed the management to retain its best employees.
Marty Roenigk died in 2009. Ott said Elise Roenigk and other longtime business owners in the city have worked to promote winter as Eureka Springs’ “secret season,” when travelers can enjoy the city without the crowds.
“It’s not as hectic as [in] October or the summermonths,” Ott said. “And the bonus is that as winter comes in and leaves fall off the trees, there’s a whole lot of architectural details visitors can’t see during the rest of the year.”
James DeVito, co-owner of DeVito’s of Eureka Springs and a member of the city’s promotions commission, said that although a general warming trend has certainly benefited the city during the winter, he thinks the overall advertising effort has helped his restaurant.
“We probably just had the best Valentine’s Day weekend this restaurant ever had,” said DeVito, who closes his restaurant each year from Jan. 1-Feb. 13. He cited a 20 percent sales bump for the weekend this year as compared with previous years.
“Saturday was miserable weather after Valentine’s Day,” DeVito said. “The temperatures were down in the 40s. And the town was packed.”
Though 2012 was a strong year, the month-to-month revenue at restaurants has risen or fallen by as much as 83 percent from one year to the next. For example, the hotel and lodging tax revenue for January fell 13.7 percent in 2010, then rose in 2011 by 9.6 percent in 2011, by 5.4 percent in 2012 and by 18.3 percent this year.
During that same period, tax receipts from lodging fell 25 percent in 2010 and another 9.4 percent in 2011, then rose 70.5 percent in 2012, before falling 25.8 percent this January.
Maloney said he is more interested in increasing annual revenue in the city than on fixating on monthly fluctuations.
Dips are “to be expected during the winter months, we’re a seasonal town,” Maloney said. “The thing I’m encouraged about is we’re getting new visitor reach, something we’ve been working really hard at.”
“We have been very blessed by the weather, although the weather’s been very fickle,” he said. “We know eventually, the weather’s going to fall against us, and we’re going to just have to say, ‘Welcome to Eureka. Bring your sled.’”
Northwest Arkansas, Pages 7 on 02/25/2013