Pockets of Arkansas' hospitality sector are recovering faster than the region as a whole as tourism-related activities gain momentum during the ongoing pandemic, according to a report from the Federal Reserve Bank.
"There are also significant disparities in leisure and hospitality sector size and activity across geographic regions," the Fed reports for the seven-state area that includes Arkansas.
"Within the Eighth District's tourism-heavy counties near the Ozarks and Arkansas' Hot Springs, the leisure and hospitality sector's share of wages and employees is three to four times higher than the national average," the report noted.
Regional Fed economist Charles Gascon, co-author of the report, said leisure travel is driving the increases in hospitality spending as business travel remains depressed under the pandemic. Short travel bursts built around weekend excursions are increasing.
"Bookings are up on Thursday, Fridays and Saturdays, but the rest of the week things are really slow," Gascon said Monday. "Part of our district is more for leisure, family-tourism type travel and that part of the sector has come back a lot stronger."
The Fed's 8th District includes all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee. Major metropolitan areas include Little Rock; Louisville, Ky.; Memphis; and St. Louis.
Tourism tax collections point to strong increases across Arkansas, with Hot Springs, the Ozarks and Northwest Arkansas experiencing robust activity in the leisure and hospitality sector. Collections in July 2021 -- the most recent month available -- jumped to $2.5 million from $1.65 million in July 2020, according to Stacy Hurst, secretary of the Parks, Heritage and Tourism Department. The figures represent the 2% tax assessed primarily on lodging and tourist attractions.
Hot Springs lost convention business during the pandemic but "has rebounded in a very strong way," Hurst said Monday, noting that collections in Garland County were $381,138 in July, up more than 60% from the year before.
Likewise, Newton County, a key jumping-off point for travel throughout the Arkansas Ozarks, showed robust increases in tourism with collections up 67% year-over-year. "That is purely leisure travel and illustrates how well Arkansas is faring in the recreation travel arena," Hurst said.
From July 2020 to this past July, collections were up 86% in Benton County and more than doubled in Washington County.
Arkansas should continue to see tourism boost the hospitality industry through November, Hurst said. "Arkansas is a very popular destination in the fall so we don't see this dropping off," she added.
Employment in the hospitality and leisure sector remains problematic even as more tourists return to the state and spread dollars across the economy. The sector had 111,300 workers employed in July, up from 105,500 in July 2020.
However, July 2021 employment is still down nearly 10,000 jobs from pre-pandemic levels in July 2019, when 121,000 Arkansans were employed in the hospitality sector.
"Securing workers is the biggest challenge we have right now," Hurst said. The statewide labor force has been in decline for months and businesses are turning to higher wages and benefit increases, such as bonuses, to lure workers. Hospitality operators are doing much the same, Hurst said.
"We have been able to raise some wages and we're going to continue to do that – we have to do that to remain competitive right now," she added.