Arkansas tourism industry rebounds from COVID-19 downturn, state officials say
September 19-25, 2022
By The Daily Record Staff
Nearly two years after Arkansas’ tourism industry sank into an unprecedented recession, the Natural State’s leisure and hospitality sector has fully recovered from the negative impact of the COVID-19 pandemic.
Annual data released on Sept. 13 by the Arkansas Department of Parks, Heritage and Tourism (ADPHT) indicates that Arkansas’ tourism industry experienced record-breaking visitation in 2021 and has recovered after the significant decline in 2020 due to the global pandemic.
Arkansas welcomed just over 41 million visitors in 2021 compared to 29.2 million in 2020 and 36.3 million in 2019. And lodging spending increased 49% after a fall of 29% in 2020. This rebound led to lodging spending exceeding its 2019 level by 5%. The data was released during the Arkansas Hospitality Association’s annual convention in Little Rock.
“Arkansas’ moniker as The Natural State provided resiliency for the tourism industry during the challenges of the past several years,” said Stacy Hurst, secretary of ADPHT. “These numbers illustrate that Arkansas is in the midst of a public perception turning point when it comes to our national profile as a tourist destination. Together we can keep that momentum strong as we head into 2023 and beyond.”
Earlier this year, state tourism officials shared similar information with members of the Arkansas General Assembly during the 2022 fiscal session. Based on collections of the state’s 2% tourism tax, it was reported in March that the industry now exceeds pre-pandemic levels of economic activity.
The 2% tourism tax is collected when people rent hotel rooms, condominiums, lodges, motor courts and other accommodations. It also is collected from campground fees and boat rentals. It is added to the price of tourist attractions. Revenue from the tourism levy pays for the state’s marketing budget.
In 2021 the state collected $20.5 million from the tax, which was a record. In 2020, when the tourism industry was affected by restrictions due to the COVID-19 pandemic, collections from the tourism tax were $13.6 million. That was the lowest it had been since 2013.
At the time, however, other gauges of tourism indicated that fewer people were working at Arkansas hotels than in 2019. According to federal workforce data from the U.S. Bureau of Labor Statistics (BLS), Arkansas lost more than half of its frontline workers in the leisure and hospitality industry in early 2020 after COVID-19 was declared a global pandemic. BLS workforce data shows that the number of workers in the industry fell 39.1% from 123,300 in February 2020 to only 74,100 in April 2020.
BLS data compiled last month by the Arkansas Division of Workforce (DWS), which is now housed in the Arkansas Department of Commerce, shows that the state’s leisure and hospitality sector employs 127,700, up 4.9% from 121,000 in 2021 and well above pre-pandemic levels. However, that number is expected to decline in the fourth quarter of this year as the Arkansas and U.S. vacation and tourism season shuts down until the spring of 2023.
The upbeat Arkansas report also comes three months after U.S. Commerce Secretary Gina Raimondo announced a new National Travel and Tourism Strategy that focuses federal government efforts to support the U.S. travel and tourism industry and sets an ambitious five-year goal of attracting 90 million international visitors to the United States each year. It is estimated that these visitors would spend $279 billion annually — expenditures supporting job creation in communities across the U.S., its territories and the District of Columbia.
The Tourism Policy Council, a federal interagency council created by Congress, was charged by Secretary Raimondo with creating the strategy to focus U.S. government efforts in support of the travel and tourism sector which has been deeply and disproportionately affected by the COVID-19 pandemic. The strategy follows a four-point approach to reduce the industry’s carbon footprint, create safe and secure checkpoints, and bolster travel and tourism in underserved and underrepresented communities across the country.
“Across all 50 states, U.S. territories, and the District of Columbia, communities are safely welcoming back visitors. From the crown jewels of our national parks and forests, to the historic and diverse sites that tell the story of our people and culture, the United States offers destinations for international travelers like no other,” said Secretary Raimondo. “The impact of COVID-19 has taken a toll on our national and local economies, but it also has presented us with a unique opportunity to mold a more inclusive, equitable, sustainable and resilient travel and tourism industry than ever before. Our new strategy leverages the best of what the U.S. public and private sectors offer, which will promote jobs, recover lost revenues, and inspire unforgettable experiences.”
The travel and tourism sector has historically been a critical force in economic growth and employment in the U.S. When non-U.S. residents purchase goods and services while in the United States, it counts as export income for the U.S. economy. In 2020, the Department’s National Travel and Tourism Office reported that the decline in travel and tourism to and from the U.S. accounted for 56% of the drop in U.S. gross domestic product (GDP), and travel exports dropped 65% in 2020 when compared to 2019, or pre-pandemic levels.
Key findings from the Arkansas Tourism Department report include:
Visitor spending, visitor-supported jobs and business sales generated $1.1 billion in tax collections that support local, state and federal government operations. State and local taxes alone topped $653 million in 2021.
National Park visitation in Arkansas rose 23% above its 2019 pre-pandemic level to just under four million visits, while hunting and fishing licenses issued to nonresidents more than doubled relative to 2019.
In 2021, tourism-supported jobs accounted for 5.6% of all jobs in Arkansas.
Nearly one-in-four (23%) of Arkansas tourism jobs were lost in 2020. The travel recovery in 2021 welcomed a return of tourism jobs, which rose to 95% of its 2019 level.
The job recovery in key industries in 2021 was strong, reaching 98% of pre-pandemic levels in the restaurant industry, 96% in recreational businesses, and 89% in lodging.
Each household in Arkansas would need to be taxed an additional $759 to replace the visitor-generated taxes received by Arkansas state and local governments in 2021.
Average room rates at hotels in the state increased by 13%.
“It’s satisfying to see these numbers and know that we’re achieving our goal to improve the economy of our state,” said Travis Napper, director of Arkansas Tourism. “Not only that, we have the great privilege of sharing the scenic beauty, authentic culture and unique wonder of The Natural State.”
1. An annual economic impact report released by the Arkansas Department of Parks, Heritage and Tourism indicates that the state's tourism industry experienced record-breaking visitation in 2021
and has recovered after the significant decline in 2020 due to the global pandemic.
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