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The $73.1 million, 226-room City Owned Hilton Vancouver Concludes Year 1 of Operations;
Hotel Has Helped the Washington State Community With Recognition and Creation
 of Spinoff Businesses in the Downtown Core

By Jonathan Nelson, The Columbian, Vancouver, Wash.
Knight Ridder/Tribune Business News

Jun. 20, 2006 -- The Hilton Vancouver Washington finishes its first year of operations this month amid accolades from city and company officials despite missing financial and performance benchmarks.

Managers say the shortfalls are slim and are expected to close as the traditionally busy summer travel season begins.

"The biggest thing we've learned is adjusting the property to local and regional markets so that we can best serve our customers or clients," said Gerry Link, general manager of the downtown Vancouver Hilton.

The $73.1 million, 226-room hotel, which is owned by the city and managed by Hilton, opened last June amid helpings of fanfare and skepticism from some who thought the city had no business owning a hotel.

The hotel finished 2005 with $5.4 million in revenue, 17 percent below what was projected. The first five months of 2006 ended with $4.6 million in revenue, again below budget, but only about 8 percent shy.

The hotel paid the city $2 million in taxes in 2005, 11.1 percent more than budgeted. Of the $1.8 million in taxes budgeted for this year, $1.1 million was paid through June.

Link expects a business uptick in the second half of the year and for the hotel to hit or exceed the $13 million in revenue budgeted for 2006.

There are several reasons Link and city officials remain optimistic about the hotel, which employs 200 people. Because of the hotel's newness, revenue forecasts for the early months were overly optimistic and based more on companywide models rather than specific information for the Vancouver site.

From February to April, revenue per available room at the hotel exceeded that of other properties within the Vancouver market.

And group bookings, a staple for hotels because of the guaranteed room and food purchases, are at 96 percent of the Hilton's goal of 21,000 group room nights for the year; and reservations are being made for events in 2007 and beyond.

"I think everyone wondered how we were going to fill 30,000 square feet of meeting space," said Steve Burdick, Vancouver's economic development manager.

Kim Bennett, president of the Southwest Washington Convention and Visitors Bureau, said the Hilton's arrival gives the agency another property to market, particularly one with so much meeting space. She said that has not only helped draw interest to the area but along with an improved economy is likely playing a part in improved hotel operations across the county.

Bennett said the bureau samples the performance of 19 hotels. Comparing January though April of this year to the same period last year, occupancy is down 0.6 percent, due to a weak April.

But the average room rate is up 13.4 percent and revenue per available room -- an industry guideline that multiplies the occupancy percentage by average room rate -- is up 12.7 percent.

Mayor Royce Pollard recognizes that people have the right to disagree how the city entered the tourism industry, but he said it is hard to ignore how the hotel has helped the community through recognition and creation of spinoff businesses in the downtown core.

"This facility has added value to our community," he said.

National media outlets from the New York Times to cable network CNN showered attention on the Hilton with stories that focused on the environmentally friendly materials and methods used to build the seven-story hotel.

The challenge for Link is to translate that into more attention locally. The monthly report to the city on the hotel's performance noted that at the end of May, Hilton was still struggling to capture the business and leisure traveler.

Gray's at the Park, the hotel's restaurant, also suffers from a lack of visibility in the minds of Link and Burdick.

The restaurant has changed its menu to reflect seasonal foods now available. Link and Burdick expect cooking demonstrations by Gray's chef at Vancouver Farmers Market to help raise the restaurant's profile.

Television viewers in the region can also expect to see more advertisements for the Hilton.

UPDATE:

--Previously: The Hilton Vancouver Washington opened last June in downtown Vancouver.

--What's new: After a year in operation, the hotel sees the good and bad in financial performance.

--What's next: Hotel officials expect to meet budgeted revenues this year due to strong group bookings.

PANEL DISCUSSION POSTPONED:

The Columbian

The Club at the Historic Reserve has postponed a panel discussion scheduled today.

The speakers were going to examine the Hilton Vancouver Washington's first year of operation.

The event will be rescheduled for late July and will look at tourism across Clark County, said organizer Arch Miller.

The Club sponsors the monthly event, called Lunch with the Challengers.

HILTON VANCOUVER WASHINGTON:

--What: 226-room, $73.1 million hotel and conference center.

--Where: Downtown Vancouver.

--Employees: 200.

--2005 revenue: $5.4 million, 17 percent below projections.

--2006 revenue: Through May, $4.6 million, only 8 percent shy of projections.

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To see more of The Columbian, or to subscribe to the newspaper, go to http://www.columbian.com.

Copyright (c) 2006, The Columbian, Vancouver, Wash.

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