Spokane Lodging Industry Reaps Big Benefits From City’s New Arena

Room tax receipts reported by hotels and motels within the city of Spokane are up 22 percent this year over last.

That contrasts sharply with an increase of just 2 percent in areas of the county outside the city. But outlying establishments are mostly smaller and report their receipts much later than in the city, according to those in the know.

So what this all adds up to, in the expert opinion of Hartly Kruger, president of the Spokane Area Convention & Visitors Bureau, is a hefty increase in Spokane visitor trade.

That assessment is endorsed by hospitality industry analyst Wolfgang Rood, senior partner of Bellevue-based Gordon/Rood Hospitality Consultants.

According to Kruger, the business community can thank Spokane’s new sports and recreation arena for much of the impetus behind the big boost. Fortunately, too, entrepreneurs had the confidence to bring on hundreds of new guest rooms, and existing establishments invested heavily in upgrading facilities to sustain the added trade generated by the new arena.

In short, Spokane’s hospitality industry, like Seattle’s and Portland’s, is on a roll.

Occupancy rates continue high, despite the additional new facilities. And room rates have risen, further attesting to the robustness of the hospitality market in major cities throughout the region, Rood says. Last year Rood told me that the average room rate here rose 8.7 percent.

That’s a very welcome sign, Kruger says. “Investors in these improvements need to earn a healthy return. They deserve it. And even with the increase, our Spokane rates remain a terrific bargain compared to other cities.”

Spokane and Eastern Washington room rates averaged $59.70 last year, Gordon/ Rood surveys show. Boise rates average five bucks higher - at $65.09 - which is basically Tacoma’s rate, too.

In downtown Seattle, the average rate is $112.90. But Bellingham averages less than half that - just $56.06.

In the past 10 years, says Kruger, the number of hotel and motel rooms in metropolitan Spokane has mushroomed from 3,500 to 5,500.

Last year, with hundreds of new rooms on the market, Spokane’s occupancy rate slipped slightly, from 63 percent to 60 percent, according to figures reported by establishments participating in the Gordon/ Rood surveys. That’s still way above Idaho’s 51-percent occupancy rate outside of Boise, where the occupancy rate is 69 percent. In downtown Seattle, Portland, and Bellevue the average occupancy rate is pushing 80 percent.

Kruger says the new arena has been a godsend for the hospitality industry during the winter off-season. For example, of the 12,000 Neil Diamond fans who jammed the arena recently, more than one-fourth came from 100 or more miles away. According to Kruger’s calculations, that translates into 750 hotel rooms.

Hospitality consultant Rood said he keeps abreast of news reports on the Davenport Hotel but he doesn’t know what credence to give stalled restoration plans for the grand hotel, mothballed 10 years now. He asked if there was “anything new of a tangible nature” to report, observed that it is an extremely difficult and costly project to pull off, and offered his opinion that, “This may well be a project for Bill Gates.”

Microsoft paychecks average $59,000

Microsoft is the only large employer in the Pacific Northwest that even approaches Boeing’s average pay - indeed, exceeds it.

A 1995 study showed Microsoft paychecks averaged $59,000 a person just in cash compensation, Marple’s Business Newsletter reports. “Stock options rather than paychecks,” says Marple’s, “make many Microsoft employees millionaires.”

The only other large Pacific Northwest company shelling out anything like that kind of compensation is Boeing, which employs many times the number of workers that Bill Gates does, Marple’s says. Per-capita pay of Boeing employees averages $52,995. That does not include Boeing’s health insurance package, payroll taxes, and other benefits, all very plush.

“Boeing’s high average pay tells you a lot about why the economy of the Puget Sound area is booming,” says Marple’s, “and why other employers grumble about having to compete for employees.”

Telect execs are finalists for award

Telect Inc.’s Bill Williams Jr., Judi Williams and Wayne Williams collectively are among 21 finalists in Ernst & Young’s Northwest Entrepreneur of the Year awards program.

Telect is the only Spokane firm so honored by a panel of peers who serve as judges in the annual awards program of the global business services firm.

The Williamses and Telect are one of three finalists in the category of Master Entrepreneur of the Year. Winners will be announced in seven categories at an awards banquet June 26 at the Westin Hotel in Seattle. Reservations may be made by calling Lisa Wirick of Ernst & Young at (206) 654-7619 by June 13. Banquet ticket price is $90 a plate.

Last year’s banquet was attended by about 500 persons.

, DataTimes MEMO: Associate Editor Frank Bartel writes a notes column each Wednesday. If you have business items of regional interest for future columns, call 459-5467 or fax 459-5482.