Hot Springs agency’s revenue off amid tourism drop

HOT SPRINGS — Overall revenue for the Hot Springs Advertising and Promotion Commission is down $2,252,646 as of Aug. 31, and the loss is expected to grow, according to a summary released this week by Visit Hot Springs CEO Steve Arrison.

The Hot Springs Convention Center, which has had to lay off more than 20 employees, is “pleading for some help from the state; from the federal government; from anyone, at this point,” Arrison told The Sentinel-Record on Tuesday.

The revenue loss includes more than $1.4 million in convention services; $827,109 in tax revenue; and $5,505 from other sources.

The tourism industry is suffering greatly during the covid-19 pandemic, and as the No. 2 industry in the state, Arrison said he is “very disappointed” with the center not being eligible for the Paycheck Protection Program, or any other government assistance, similar to what restaurants and hotels have been eligible for.

“We were the first industry affected by this pandemic; we’ll be the last industry to recover,” he said. “Fortunately for our friends in the restaurant and hotel business, they were eligible for the payroll PPP money, grant moneys, but our meeting facilities were not eligible for anything.

“As … governmental agencies, we were written out of all that aid,” he said, “so we didn’t get any federal aid, and we have yet to get any aid from the state of Arkansas, so that’s very disappointing to me.”

Arrison noted that in an effort to gain access to government assistance, they did have a “good” meeting with Gov. Asa Hutchinson several weeks ago.

“I think that the governor — I think they feel like we should get our money from the monies that are going to the counties and the cities, but the counties and cities have their own holes to plug,” he said. “I think as the No. 2 industry in the state that we should have dedicated CARES Act funds that go to our facilities; I really believe that,” he said.

“We’re a big demand generator; we bring millions of dollars into the state of Arkansas and into our communities every year, and yet we’ve been totally ignored in this process so far.

“Hopefully that will change. I think Gov. Hutchinson’s done a great job in leading our state through this pandemic so far, but our industry is crying for help right now, and I’ve yet to see any response to answer that.”

According to the summary, overall expenses were cut by $1,804,005 to offset the loss of revenue, which includes its advertising contract of $1,286,841, payroll services of $452,059, and $65,105 in other areas.

“We have had to lay off many of our long-term employees (27 of 60 full-time employees, 100 part-time employees) due to the lack of business or resources available to government agencies such as ourselves,” the summary said. “Without the PPP funding that was available to other businesses we had no choice but to let go of some of the best employees in Hot Springs.”

The ad commission issued bonds in December 2019 to pay for construction of the Majestic Park baseball complex that has an annual obligation of roughly $600,000, which has added to the “cash flow crisis” due to the pandemic.

“We have bond obligations and fixed costs that have to be met whether we have the business or not and we will need to meet those obligations regardless,” the summary said.

Despite financial woes, Arrison said none of the bonds will be in default, and will be the first thing paid back.

“Before we default on bonds we would, you know, we would shutter the convention center and stop that expense; hopefully, it won’t come to that. I mean, if this goes for another year or two years, who knows how long this is going to last?” he said, later clarifying that closing the convention center would only be a worst-case scenario.

“All we’re asking for is some help. I mean, in my mind, hopefully, this will be over by June; hopefully, the meeting business will pick up by June, if not before.

“We just need some help right now, to get us through, so we can live to fight another day, and that’s what we’re — we’re pleading with the state for that help, and hopefully a national package, if passed, another CARES Act, hopefully we will be included in that,” he said.

“We’ve just got our fingers crossed and we’re waiting, and we’re working as hard as we can; we’ve made all the cuts that we can. You can see where we’ve cut all of our expenses trying to make up the difference, but you can only cut so far when you’ve got a maintenance contract. … We’ve cut our personnel about as bare as we can go.”

According to his summary, as of Aug. 31, the ad commission still has a shortfall of $448,641. “We anticipate that this loss will grow as we are coming to our slow time and tax revenue will diminish in the fall months along with the canceled convention services,” the summary said.

Arrison noted there is about $2 million in the convention center’s nonrestricted reserves, which has yet to be pulled from, but he suspects they will be forced to do so this month.

“I think that the governor — I think they feel like we should get our money from the monies that are going to the counties and the cities, but the counties and cities have their own holes to plug. I think as the No. 2 industry in the state that we should have dedicated CARES Act funds that go to our facilities; I really believe that.” — Steve Arrison