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Wednesday, July 22, 2009

Oregon: Hotels look empty here

A reader writes:

Interesting article for you. More distress on the horizon: [link].

One "expert" thinks the USA hotel biz could see a 20% failure rate by late 2010.

Note: There is no turnaround in sight for the biz or leisure travel / tourism. Airline passenger boardings, car rental sales and hotel occupancy continue a downward slide... here in Portland as well as throughout the world. We thought last year was horrible; it just keeps getting worse. Unfortunately, this downward spiral is not getting reported locally.

Perhaps our county, city, Metro and industry leaders should be focusing on how to keep existing hotels open, rather than spending $12 million on engineering plans for a 600-room public-financed hotel [at the Convention Center].

What could they do? Assist hotel properties in lowering costs related to government taxes, fees and more...

What will they do? Probably spend more [money] with Wieden & Kennedy. That is the POVA / OR Tourism mindset. However, any first-year business student will tell you this is not a demand issue.... The folks are just not coming for a year or two... Get used to it, fellas!

I think it's a demand issue -- demand is down, and it's not responsive to advertising. But I never spent a day in business school.

Comments (5)

David Stern once claimed that Portland has never hosted the NBA all-star game because of a lack of hotel inventory. Guess he can't make that excuse now!

I'm not surprised by this, and I've already seen the results of the current meltdown. I was coming to town last month for a book signing, and I was simply amazed at how much prices were dropping for prime and economy hotel space in Portland. When it's much cheaper today to get hotel space in downtown than it was 13 years ago, when I first moved there, it might be a hint that the convention center hotel would be a flop.

Well, it'll be a flop to everyone but Sam and Randy's buddies building it. Of course, they'll be long gone when the city finally has to deal with the fact that the hotel might pay for itself in a few hundred years. So long as they're going to have a long life of snorting Peruvian flake off the thighs of a fourteen-year-old stripper, then, full speed ahead!

Maybe we could house homeless families in one of these failed hotels.

Who would have thought it? Eric Sten was way ahead of us on this!

Hmmm this ties into a conversation I had this evening with someone. The Nines opened at about $240 a night for lowest priced room. By Feb or March, they were running $99 specials on some rooms. Of course parking is a lot extra.

The Wall Street Journal ran a couple of articles recently discussing the meltdown in hotel occupancy rates and severely lowered profits. Marriott in particular, has been hit very hard.

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