Published February 2002

Economic downturn shows up in occupancy rates

By Kimberly Hilden
Herald Business Journal Assistant Editor

The lodging industry — local and national — has had a rough time of it recently.

Following the Sept. 11 terrorist attacks, travel nearly ground to a halt before gradually picking up. Months before that, a slowing economy also was taking its toll.

According to Smith Travel Research, an independent research firm that tracks and analyzes lodging industry data, occupancy in the U.S. lodging industry was 64.2 percent in the third quarter of 2001, down 8 percent vs. the year before.

And preliminary numbers for December aren’t much better, with the industry occupancy rate down between 5 and 7 percent vs. the year before, according to the research group.

In Snohomish County, the travel and tourism industry also is down, and reflected in a decline in occupancy rates at area hotels, said Sandy Ward, Executive Director of the Snohomish County Tourism Bureau.

“Part of what happens in Snohomish County is tied to the corporate market, rather than the convention market like Seattle and Bellevue, because we don’t have a convention center,” Ward said. “So when we lose business, a lot of it has to do with things like when Boeing announces it’s going to lay off 30,000 people — businesses stop traveling.”

At the Holiday Inn Hotel & Conference Center, business was down about 8 percent during the fourth quarter of 2001 compared to the previous year, General Manager Bob Keller said.

“We’re doing OK; we’ve got a pretty loyal following here,” he said. “We could be doing better if the economy was doing better.”

Although Keller said the hotel has seen a drop in international travel guests, regional travel is up, with guests coming from Spokane; Vancouver, British Columbia; and Portland, Ore.

To attract business, the hotel has been advertising through its Holiday Inn Northwest cooperative, attending various trade shows and networking with business and travel associations, he said.

“Working with King and Snohomish County tourism bureaus has helped out quite a bit,” Keller said.

Over at the Best Western Cascadia Inn, General Manager Mary Bartlett agreed, noting the hotel has been working with the Snohomish County Tourism Bureau through its discount lodging programs such as Rooms at Par, which caters to Canadian travelers, and Grandparents Stay for Free, which focuses on local families.

Still, December occupancy was down between 5 and 10 percent from the previous year, she said.

“Holidays are a quiet time for hotels,” she said, noting that an influx of Navy business made for a good October and November. “I expect things will start looking better in March.”

Although she doesn’t have a timetable, Ward expects the industry to improve with the economy.

“Predictions from the Travel Industry Association are that things are going to pick up, consumer confidence is going to pick up and the tourism industry will follow,” she said.

For some hotels, local production of the movie “Ring” had things picking up early.

“Business is up,” said Sandy Fisher, Director of Sales and Marketing at the Howard Johnson Plaza Hotel. “I think we got a big chunk of production company business — that helped us out.”

That “big chunk” equaled about $90,000 in revenue according to previous reports.

But the Howard Johnson was only one of a number of hotels where the stars and production crew for the $60 million DreamWorks movie stayed during November and December filming. The Inn at Port Gardner and the Marina Village Inn — both in Everett — and Hawthorn Inn & Suites at Smokey Point in Arlington also benefited, with the cast, director and producer staying at the Hawthorn.

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