After a long recovery from recession, the hotel industry in Vancouver-Clark County has regained its footing with rising room rates, increasing occupancy and growing employment.
At year’s end, the county’s hospitality and food service businesses employed 11,900 people and had added 900 new workers in the 12 months through December. That total finally surpasses pre-recession employment in the local market from 2009.
The improving business climate is prompting a round of capital investment in new projects, large and small and more robust marketing of the region to meeting planners.
This is a big change from the worst of the recession in the Portland-Vancouver market when hotels were only half full and room rates had dropped to $60 a night as the region’s business travel and convention business turned down. Staff reductions followed.
Now, low gasoline prices and a steadily improving regional economy are supporting a turnaround, said Kim Bennett, president and CEO of Visit Vancouver USA. The nonprofit agency is the official destination marketing group for Vancouver and surrounding area.
Vancouver-area hotel room occupancy rate increased from 68.8 percent in 2014 to 72.5 percent last year, second only to King County in statewide comparisons of similar markets, Bennett said. Local nightly room rates went from $91 in 2014 to $101 last year. That is the third best increase in similar markets, statewide.
“We saw a huge jump in occupancy last year and expect to see more growth this year,” Bennett added. That is, if gas prices stay low and business travel and group convention business continues to improve.
With Portland’s average room rate now at $180 a night, plus another 13.5 percent tacked on in lodging taxes and fees, Vancouver area hotels seem to have a competitive price advantage. A proposed increase in Oregon’s lodging tax would add another $1.80 to a Portland-area room bill.Vancouver area hotels collect a 10.4 percent lodging tax, plus $2 inside city limits and in unincorporated Clark County per stay.
The overall rate difference helps Vancouver area hotels compete for leisure and individual business travelers to the metro area, but less so for contract groups and convention business, Bennett said.
“On the group side, our competition is more from around the rest of Washington,” she said.
On both sides of the Columbia River, the tourism-hospitality industry is a big piece of the economy with an estimated $4.9 billion spent by visitors on rooms, food, transportation, retail purchases and entertainment in the combined market last year.
In Clark County, tourism spending reached an estimated $481 million at local businesses and generated an estimated $41 million in local and state taxes.
Metro-wide, the industry supports 34,900 jobs.
What’s ahead?
The improving business climate has already brought two new projects to the Vancouver market – a 99-room Hampton Inn & Suites near Cascade Park opened last year in east Vancouver and an 80-room Candlewood Suites at 2010 S.E. 192nd Ave. began operations last month. On the drawing board is an 82-room Holiday Inn Express near the Candlewood site at 20th Street and 192nd Avenue and a three-story, 90-room facility near the Doubletree on Mill Plain. Meanwhile, both Gramor Development and the Port of Vancouver are proposing larger hotels projects on the Vancouver waterfront.
Bennett sees another 3 percent increase in room occupancy this year in the Vancouver area market. That is good news for Visit Vancouver USA, which relies on a $2 per night charge at properties with 40 rooms or more to support its marketing and convention booking business.
Bennett said increasing lodging fee revenue is allowing the bureau to distribute the official annual Vancouver USA travel magazine throughout the Portland market in April. An ambitious destination video is planned for release in May to media and commercial cable buyers.
“There’s a big correlation between this economic recovery and our ability to build the tourism industry here in Southwest Washington,” Bennett said. “That includes more marketing efforts as well as more resources to reach out to meeting planners.”
Among the largest conventions coming to Vancouver this year is the Barbershop Harmony Society in October. The group has booked 925 room nights.
Vancouver-Clark County 2015 Hotel Industry Profile
Rooms: 2,698 Properties: 28 Average room rate: $101
Average occupancy rate: 72.5% Lodging tax: 10.4%, plus $2 in Vancouver and unincorporated Clark County
Countywide employment: 11,900 in hospitality-food services Local tourism spending: $481 million
State-local taxes collected: $41 million Outlook: Two projects proposed in east Vancouver would add 174 rooms, and two hotel projects are proposed for the Vancouver waterfront.
Source: Visit Vancouver USA, Washington Dept. of Employment Security
