You can almost taste the worry in the important travel-and-visitor industry of the Pacific Northwest and Alaska as the crucial summer season approaches.
Business is down. No wonder. The travel sector has been hit hard by weak economies nationally and regionally, fear of terrorism and now the deadly Severe Acute Respiratory Syndrome (SARS) that originated in Asia. Corporate travel continues to decline, and cost-conscious leisure travelers book ever closer to the actual time of travel.
The good news? "Drive to" markets like central Oregon and the Oregon Coast have remained relatively healthy. That's important, because the Pacific Northwest in general depends heavily on visitors who arrive by car or RV.
"People are now traveling more by car and staying closer to home," notes a hotel-industry consultant. "The performance of properties in our region that are outside urban centers is at or above last year."
Other pluses include the brevity of the war with Iraq, adequate rain (reducing worry about restrictions on summer recreation) and lower gas prices. Says a state tourism director: "I'm feeling a lot better than 30 days ago."
The visitor industry has grown steadily in importance to the region's economy. Using a proprietary model, the Travel Industry Association of America estimates travel spending in the five states we cover totaled almost $21-billion in 2000 and supported 287,000 jobs directly (table). The data cover trips more than 50 miles from home or an overnight stay as well as international visitors.
By the numbers - Travel spending and employment
Pac NW/Alaska 287.0/$20,823
Employment in thousands; spending in millions.
Data are for 2000, the latest available from the
Travel Industry Association (www.tia.org)
Big-city hotels in the region and elsewhere have been hit particularly hard by the broad decline in corporate travel. "The weak economy has hurt the most, but there's also oversupply in most markets," says a hospitality-industry consultant. "Generally all the urban markets have been hit. Maybe you could say Boise market performance isn't down as much as Portland or Seattle, but only because that market hasn’t seen so much overbuilding."
A board member of a major motel chain reports that its properties along interstates in this region "have been doing well. . . . We don't see a lot of worry except from [operators] in cities." One positive omen for rural markets: Bookings for guided fishing trips in Montana are up sharply.
But corporate-meeting business has dropped off a cliff. Companies that used to fly a whole group to a meeting now just send one. Some meetings are being replaced by videoconferencing.
Competition for meetings has become superheated. One sign of the times: Top-tier venues like San Francisco and Chicago are going after corporate and industry meetings traditionally held in second-tier markets like Portland.
The number of deaths worldwide from SARS is insignificant compared with real killers like heart disease and lung cancer. Yet the headline-grabbing SARS epidemic has everyone in the travel business jittery, especially hotel operators worried that people will become reluctant to attend meetings. Sources tell us that British Columbia already has seen dramatic cancellations of tour groups from Asia.
Bookings for Alaska cruises are slower than last year, though the pace has picked up since the war ended. Cruise capacity to Alaska is up 7% this year, on top of a 12% increase last year. Lines find they must discount steeply. Yet fear of overseas travel may help Alaska (60% of visitors arrive by ship) before the season is out.
The Pacific Northwest should pick up some mind-share next year from buzz surrounding the bicentennial of the start of the Lewis and Clark expedition in 1804. Research shows that people familiar with the celebration are most likely to visit Oregon, Idaho and Montana.
But one of our best-posted sources laughs off the idea the region will be overrun with 4-million Lewis and Clark visitors between 2004 and 2006. "Where would we put them?" he asks rhetorically. "I see added impact and an extra attraction for visitors, not dramatic impact."
Copyright © 2003 Newsletter Publishing Corp.
This article appeared in the May 14 2003 issue of Marple's Pacific Northwest Letter and is published on this web site with the permission of the publisher. The Seattle-based newsletter provides subscribers with intelligence on the economy and companies of the Pacific Northwest. It has been published every other week without interruption since 1949. Request a sample copy of the newsletter by sending an e-mail with your name and postal address to email@example.com.