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Quick - Turn out the Lights - Vancouver, Washington Hoteliers
Cutting Operating Costs but Not Customer Service

By Julia Anderson, The Columbian, Vancouver, Wash.McClatchy-Tribune Regional News

Nov. 22, 2009--Every time a guest checks out at the Best Western hotel in Battle Ground, manager and co-owner Alkesh Patel sends someone to immediately turn off lights and heat in the room.

Patel and other Clark County hotel operators are looking for every way possible to lower costs in the face of the economic downturn that has hit the region's travel and hospitality industry hard this year.

"We're not cutting back on customer service, in fact we're upping that a notch ... but we are looking for ways to cut operating costs every day," Patel said. That means better energy efficiency by sometimes shutting down an entire floor of the two-story hotel, if bookings are slow, and constantly looking for other cost-cutting opportunities.

But while he's been reducing costs, Patel said he is emphasizing service and spending more on marketing, even though bookings are down between 12 percent and 18 percent from 2008.

"You need to gear up to gain market share," he said.

The Battle Ground Best Western's performance actually is above average among Clark County's hotel-motel operators, who manage a total of 2,687 guest rooms around the county. In August, just half those rooms were rented, down from 72.46 percent occupancy in 2008. Room rates also have been under pressure as operators scramble to lure guests. The county's average hotel room rate was down 7.6 percent in August to $78.76 from $90.64 last year. Overall operating revenue for the industry here was down 33.13 percent, the worst monthly showing of the year.

The decline has implications for industry employment, as well as tourism promotion paid for with a $2 fee charged on every room that's sold in the county. In addition, local and regional governments collect separate lodging taxes per room. Through August, tourism promotion collections were down 14.7 percent to $516,784 this year from 2008 and lodging tax revenue was off 21.5 percent to $755,746.

The industry's employment picture also looks weak.

In October, food services and accommodation businesses employed 10,400 people in the county, down 400 jobs, or 3.7 percent, from last year.

Worst than rest

The region seems to be having a worse time than the rest of Washington, according to new numbers from the Southwest Washington Convention & Visitors Bureau, which works to attract business here.

Year-to-date through August, local room occupancy was down 12.9 percent from 2008, while statewide room occupancy was off just 6.6 percent.

"While it looks like the rest of the state is poised to bounce back, Clark County will not follow as quickly because we're more aligned with Oregon's economy," said Kim Bennett, president and CEO of the convention and visitors bureau in Vancouver. "Everyone's down, but we're off a bit more."

Bennett explained that the county's larger full-service hospitality properties are reliant on large group and convention business to fill up rooms, which then have a spin-off effect on smaller properties.

"When business fell off, everyone began competing for the transient business tied to tourism and leisure travel," Bennett said.

"It's been tough."

Brett Wilkerson, president of the hospitality division of North Pacific Management Co. in Portland and manager of Vancouver's 182-room Heathman Lodge, said he sees the industry hitting bottom in late summer with a slight upturn in October.

"We're certainly not immune, but I think we've plateaued," Wilkerson said. "October was good and our December Christmas party business looks good."

Wilkerson's company this year spent $7 million expanding and upgrading lodge operations with 40 more guest rooms, 4,000 square feet of additional meeting space and a new banquet kitchen.

He said the lodge has tried not to lower prices, but instead has gone after new business and worked to add value to operations with more meeting space and service upgrades.

"You just have to keep breathing through this," Wilkerson said. "November won't be that kind to us, but we're encouraged by Christmas."

Gerry Link, manager of the downtown Hilton Vancouver Washington hotel, said that like everyone else in the industry, his operation is working to build relationships with current customers and be ready to add customers when the industry begins to rebound.

"Our biggest slice of business is on the convention side and that's what has slowed," Link said.

To address the business downturn, the hotel has cut its work force by 15 percent and has been renegotiating every contract it can with vendors.

"We're basically trying to do more with less," Link said.

Going forward

The outlook for 2010 still is murky, say industry leaders.

Link sees the first half of 2010 behaving much like 2009. "Our hopes are that the second half will show rebound and more strength," he said.

Bennett sees some of the group business coming back next year.

"The groups are smaller with not as many delegates," she said. "And they are not as quick to book. Our challenge is converting leads into bookings."

With less funding next year because of a decline in tourism promotion fee collections, Bennett said her bureau, like everyone else, is working smarter.

"We're going after business wherever we find it," she said. "We're talking to our own business community about keeping meetings local. We're working to get business here from the Puget Sound area. We're looking at the (Portland) airport properties across the river. We steal from everyone we can," she said.

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

Copyright (c) 2009, The Columbian, Vancouver, Wash.

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