Panel in Hot Springs approves hiring freeze for 2009 budget
Posted on Sunday, December 7, 2008
HOT SPRINGS — The Hot Springs Advertising and Promotion Commission has frozen hiring amid concerns about the economy’s impact on travel.
The hiring freeze affects six full-time positions in the 2009 budget and an indeterminate number of part-time positions, which fluctuate depending on events taking place at the center.
The six vacant full-time positions, five of which were carryovers from the 2008 budget, were included in the 2009 operations budget for the Hot Springs Convention Center, which the ad commission approved in October, said Steve Arrison, chief executive officer of the Hot Springs Convention and Visitors Bureau.
“We have very little turnover... in other departments,” Arrison said this week.
He will re-evaluate the decision in the first quarter of 2009 after tax collections are reported for the remainder of 2008, Arrison said.
“Part time is just on a need basis. I’ll just be watching that carefully as we move forward,” he said.
Arrison did not rule out the possibility of asking the commission to meet again on the budget in January or February and make adjustments as necessary. Department heads already have been put on notice that they must take a “hard look” at their budgets after the first of the year.
“December is sort of a slow month, so there’s no harm in putting a freeze on now. Let’s see what the next couple of months of collections bring in,” he said.
None of the actions will affect advertising, Arrison said.
“We’re not going to touch advertising at all because I think it is very important in a down market to really get your message out — advertise more, not less,” he said.
The 2009 budget approved by the commission in October projects a total operating revenue of $ 7. 1 million with interest earnings of $ 88, 143, and operating expenses of $ 7. 8 million for a net loss of $ 621, 729, including depreciation. Without depreciation, the proposed 2009 budget is in the black by about $ 700.
In the weeks since the ad commission approved the budget, all of the long-term industry forecasts for leisure tourism have been “so negative,” Arrison said.
Some analysts have predicted that tourism will be down 3 percent nationwide, he said.
“We know we are an affordable vacation destination, so hopefully if people are scaling back their plans, they’ll come to Hot Springs,” Arrison said.
If people are laid off, however, he said, “they’re not going to travel at all.”
The Dallas / Fort Worth area is Hot Springs’ No. 1 feeder market for tourists outside of Arkansas, which is the No. 1 market overall.
“The Texas economy is robust, in many parts,” he said. “Texas is doing better, I think, than a lot of other states, so that’s a plus for us. I [may ] be wringing my hands for no reason, but better safe than sorry.”
While convention center bookings and deposits are at an all-time high since the city expanded the convention center 10 years ago, Arrison’s concern is for the effect of the economy on leisure tourism.
Tourism is an important source of income for the commission. The bulk of its operating revenue comes from the city’s 3-cent advertising and promotion tax, which is levied against restaurant sales and hotel and motel room rentals.
“We are an affordable destination, but still with everything that’s going on, it makes it hard to sleep at night,” he said. “It’s very hard to predict. I’d rather be ultra super conservative and add back rather than be trying to unring the bell when you roll out programs and try to cut them back.” Ad tax collections were down 5. 6 percent in October compared with the same period in 2007. Since the tax is collected at businesses one month and remitted to the commission the next, October collections represent sales made during the month of September.
Collections are up 1. 99 percent for the year.
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