The Cd’A incident raises questions about the need for more hotels

An exceptionally busy spring weekend and an unfortunate incident that followed raise the question: Is there a shortage of hotel rooms in Spokane County?

Despite divided opinions from the local catering industry, there seems to be a consensus that the need is not urgent, but an increase is to be expected.

In late March, the University of Utah women’s basketball team visited the Inland Northwest for its second-round NCAA Tournament game against Gonzaga University. With no hotel rooms available in Spokane, the Utah team stayed in Coeur d’Alene, where it faced racial slurs and other intimidating gestures on the way between its hotel and a downtown restaurant.

This incident, along with new venues in Spokane and a growing tourism sector, have sparked discussions about whether Spokane County needs more hotels.

“Spokane is definitely growing,” said Jessica Deri, sales manager for the Spokane Public Facilities District. “The Convention Center used to be the main driver for overnight stays, and now we added The Podium, which attracts a lot of overnight stays for sporting events.”

ONE Spokane Stadium also increased the number of sporting events after opening last year.

Unlike conferences, double rooms are often required for sporting events because teams can save money by accommodating two people in one room, Deri says.

“Sometimes we have enough hotel rooms, but not enough double rooms for sports. That can be a challenge.”

When the Utah basketball team stayed in Coeur d’Alene, it was because there weren’t enough double rooms, Deri says.

During this time, Spokane hosted both men’s and women’s NCAA tournament games, as well as the first weekend of the Pacific Northwest Qualifier volleyball tournament, held annually in Lilac City and historically one of the area’s biggest draws. Additionally, the Spokane Velocity men’s soccer team played a game at ONE Spokane Stadium this weekend.

Grant Guinn, a hotelier who runs Tru by Hilton Spokane Valley with his wife, Elisabeth, said it’s unusual for so much to happen in one weekend.

“I think it was definitely an anomaly that the team had to stay in Coeur d’Alene,” Guinn says. “It was the perfect storm, so to speak.”

In general, Guinn says, downtown Spokane would be better off filling its existing hotels rather than trying to expand inventory.

“You don’t want to open and expand a lot more hotels just for an extra weekend, which has been the case in recent years,” he says. “You have to fill the hotel the other 363 days of the year too.”

Rose Noble, president and CEO of Visit Spokane, says opening new hotels in Spokane would bring benefits, but stops short of saying there is an immediate need.

“There are definitely a few times a year when we are at capacity and multiple venues are booked,” says Noble. But she adds, “Every hotelier wants concrete data that shows occupancy and revenue per available room at a level they are willing to invest in.”

Occupancy report data provided to the Journal by Visit Spokane shows a slight decrease in occupancy rates in 2023 compared to last year.

For hotels in downtown Spokane, occupancy was 58.3% in 2023, compared to 59.1% in 2022.

In Spokane Valley, occupancy reached 63% in 2023, compared to 63.4% in 2022.

Across the district, rates were 62.6% in 2023, up from 63.7% in 2022.

However, so far in 2024 there has been an increase in occupancy rates compared to the first four months of 2023.

Through April 30, year-to-date occupancy at downtown Spokane hotels was 54.1%, up from 50.8% in the same period last year.

The Valley’s occupancy rate is at 55.5% through the end of April (compared to 55.1% last year). The national rate is 57.1% (compared to 56.2% last year).

While the need may not be immediate at this time, Noble expects demand to grow over time as the county’s visitor numbers continue to rise.

In 2023, Spokane County had about 9.8 million visitors, returning to pre-pandemic levels, according to Tourism Economics data provided to the Journal by Visit Spokane.

Visitor spending was $1.5 billion in 2023, up from about $1.42 billion in 2022 and $1.39 billion before the pandemic in 2019.

Noble says she expects visitor numbers to continue to rise.

“We want to make sure that people at least stay in the district,” Noble said. “In situations where we don’t have rooms, it would be great to have another way to accommodate people.”

However, she points out that the addition of new hotels would need to be done in a sustainable manner and take into account factors such as infrastructure constraints and the number of experience-oriented businesses in the area.

“In terms of growth, we are always excited about the potential of new business opportunities, especially when it comes to a points-based hotel,” says Noble. “It’s always a great thing for us when we have multiple systems for people to book through.”

Deri says it would be good for Spokane to introduce another national hotel brand.

“We have a Hilton presence and a very strong Marriott presence, but we don’t have a Hyatt. We don’t have an omni. We don’t have a Loews,” she says. “There is a possibility that other big national brands will come in with points systems that people will take a cue from.”

Even if there is no shortage of rooms all year round, Deri says there is still a need for additional hotel rooms.

“There are conventions and things we can’t bid on because we don’t have enough (space) inventory,” Deri says.

The number of large concerts has also increased.

“In the last three years, we’ve about doubled the number of big shows we’ve ever had,” she says.

A major concert is one where tickets bring in more than $1 million. Before the pandemic, Spokane hosted about 1.4 major concerts a year. There were three in 2022, six in 2023 and two so far in 2024, with two more “on the horizon,” Deri says.

“When we have these big shows, they really attract a lot of out-of-town visitors, who obviously need more hotel rooms,” she says.

ONE Spokane Stadium, which opened last fall Also is expected to increase demand for hotel rooms. The Great Outdoors Comedy Festival, which will be held at the stadium Aug. 23-25, future outdoor concerts and possibly a music festival at some point will draw people from out of town, she says.

The stadium can accommodate up to 15,000 people for a concert, and Deri estimates that between a quarter and a third of the visitors will come from outside the city.

Downtown Spokane and the adjacent North Bank neighborhood would be the ideal location for a new hotel because of their proximity to various venues, Deri said.

“It’s so rare that the five biggest venues are just a mile apart, right in the city center,” she says. “I hope this will attract some investors and show them the potential.”

Beyond the city center

However, Guinn says he sees the West Plains as an ideal area for further hotel growth.

“It seems like the airport market and the West Plains market are really ripe for further hotel growth,” says Guinn.

According to Guinn, there is no need for more traditional hotels in Spokane Valley, but there is a need for more upscale, extended-stay accommodations.

“Extended-stay hotels” are designed for people who are staying in one place for longer than a week or even longer than a month, Guinn explains. For example, if someone is moving to the area for work and is waiting for their home to be built, they may need a longer stay option.

Guinn and his wife plan to break ground this summer on a Homewood Suites by Hilton at 13515 E. Carlisle. The planned five-story, 132-suite property is considered an extended-stay hotel, he says.

As for more traditional hotels, Guinn says there are times when conventions or other large events in Spokane push people into the Valley segment, and that there are times in the summer when visitors from Coeur d’Alene move into the segment his hotel.

“Spokane Valley is a good market, but you can’t open too many hotels there too quickly because that just dilutes the existing business,” Guinn says.