By: Marc Stiles/PSBJ
The region’s hotel market has grown 14 percent in the last five years, outpacing demand and limiting profitability.
Jena Thornton, a hotel consultant at Kinzer Partners in Seattle, hopes the rebound occurs in the summer of 2021 but thinks 2022 is more likely.
“My projection is the market still needs another 2,000 to 3,000 rooms after what’s already been opened,” she said, noting that not all of the proposed projects will get built. The hotel that had been planned for the Rainier Square development, for instance, has been replaced with a commercial office building.
“We are going to need (the new hotels). We absolutely are, but we really don’t need them for another three or four years,” she said.
The challenges are rate deterioration in the face of rising operating and development costs, she said. In addition to the RevPAR decline, the region’s average daily rate (ADR) dipped 2.7 percent, according to STR.
“The market is still running high octane,” Thornton said. “We’re having significant demand growth still. It’s just at a slower rate than the supply has happened.”