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There’s room at the inn as lodging industry feels drop

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Archives - March 2009
Sunday, March 01, 2009
TheNines.jpg The Nines, a luxury hotel in downtown Portland, is running discount deals on room rates.

STATEWIDE Oregon’s lodging industry is taking a significant financial hit as consumers and businesses cut out unnecessary expenditures such as travel from their budgets.

The lodging industry — hotels, motels, resorts, and bed and breakfasts — has seen declines nationwide in occupancy rates and revenues per available room, as did Oregon, where occupancy rates fell from 61.3% to 58.4% last year, with occupancy rates especially low over the holiday season, according to Smith Travel Research.

“Beginning mid to late last fall, we’ve seen continual decreases,” says Jeff Hampton, president and CEO of the Oregon Lodging Association. “As with every industry, no one is immune to these times.”

Lower occupancy rates are being seen at luxury hotels and economy hotels. Even bed and breakfasts are at risk, adds Hampton. Occupancy rates aren’t likely to rebound soon. According to the Hospitality Outlook Survey published by DLA Piper, 62% of industry executives predict that rates will drop beneath the post 9/11 record low of 59%.

With Oregon’s hotel and motel industry earning $3.9 billion dollars annually — nearly half of the state’s $8.3 billion in tourism revenues — dwindling travel dollars are challenging state hoteliers to decrease costs without cutting quality and service.

Oregon-based Shilo Inns says it is picking up market share by attracting customers from all price points, including well-heeled consumers who are looking for good room values.

Portland luxury boutique hotel The Nines says it’s surpassing its expected occupancy rates, due in part to promotions. The Nines is offering a $99 room rate that is helping draw in customers not considered traditional luxury consumers, says general manager Frederick Kleisner.

But with lower than average winter travel weakening lodging revenues, hoteliers across the state are hoping for a better summer season.

“July is six long months away,” says Hampton. “But it can’t get here soon enough for our industry.”


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