Will Portland’s hotels bounce back post-pandemic?

Is Portland Over?

Occupancy rates still low, which keeps hotel workers laid off

PORTLAND, Ore. (KOIN) — Devastating. Disaster. Horrific. Those are a few of the words some of Portland’s top hoteliers use to describe what happened to Portland’s tourism industry since the start of the pandemic.

Downtown Portland has long been an international tourist magnet but the city’s polarity reversed in 2020, transforming into a troubled place that’s pushing those much-needed visitors away.

George Schweitzer runs the historic Benson Hotel, which never once closed its doors to tourist in more than 100 years. Until December 2020. That’s when the Benson’s occupancy rate plummeted from 90% before the pandemic to single digits.

“We had 165 employees before COVID hit,” Schweitzer said. “In December we had 6 employees. I had to lay everyone off. We closed for most of December and all of January.”

George Schweitzer runs the Benson Hotel in Portland, June 2021 (KOIN)

The Benson is among 22 Portland hotels that temporarily closed, leaving thousands of people without work. The soaring 455-room downtown Hilton, directly across the street from the Benson, also shut down and boarded up. The new 600-room Hyatt Hotel, built with public funding to bring more conventions to the city, had only been open a few months when the pandemic hit. Its doors closed, its newly hired employees were laid off for more than a year.

Now, most of the closed hotels — including the Hyatt — recently reopened, but occupancy rates remain very low. That’s why so many hotel employees are still out of work.

Mike Daley, who manages several Portland hotels and is chairman of Travel Portland, said laying people off was extremely difficult.

“I can tell you one of the most painful things for us in our hotels is having to lay off 80% of your staff for an extended period of time,” Daley said. “It’s extremely painful and an emotional thing. We have people that have been with us like family for decades.”

Occupancy rates

KOIN 6 News compiled data from STR, a hotel research company that shows occupancy rates in downtown Portland were at 77% in 2019. They plunged to 31.8% in 2020. So far this year, downtown hotels were 26.8% occupied.

“We’re one of the two worst hotel markets in the country right now,” Daley said. “It’d be to do with the civil unrest. It’s gone on for quite a period of time.”

While tourists have been avoiding the downtown area, occupancy rates at hotels near PDX, like the Sheraton which Daley manages, have been holding up much better. In April, airport hotels had a 55% occupancy rate — a whopping 22% higher than downtown hotels.

That’s a dramatic change from 2019, when downtown hotels had a 77% occupancy rate while airport hotels had 70%.

Tourist reactions

Inside the downtown Portland Hilton Hotel, June 2021 (KOIN)

Tourists, such as California residents Ashish Samuel and his mother, are skittish about Portland.

For their first-ever visit to Portland, they were attracted to downtown by the remarkable history of the ornate Benson Hotel. But they admit their fear of civil unrest and street corner homeless camps made their trip a difficult decision.

“We were a little bit hesitant,” Samuel told KOIN 6 News. “I mean, after coming here we didn’t know what to expect. But when we saw the tents and all the homeless we were a little bit more hesitant and a little bit more scared.”

“I’ve had guests that love coming to Portland and they say, ‘What happened to your city?’ You know, what has happened?” Schweitzer said. “It’s those letters that, really, I think, share the sentiment. That’s a little frightening.”

Schweitzer believes complaining and criticizing is a waste of time so he teamed with SOLVE, which now operates regular downtown litter and graffiti cleanups out of his hotel with more than 100 volunteers taking to the streets.

“We’ve been doing that for the past 7 months consistently,” he said. “I’m pretty proud of that.”

Portland is not the only West Coast city struggling to attract tourists.

Hotel occupancy data shows that, just like Portland, 2019 was a banner year for tourists for Seattle and San Francisco. But last year the City By The Bay plunged from a hotel occupancy of 85.2% to 40%. In Seattle, it dropped from 79.3% to 27.6% — which is 2.5% worse than Portland.

All 3 cities continue to struggle.

Travelers at PDX, June 2021 (KOIN)

What’s next

“So I do believe the future is going to be very good for our city,” he said. “This is a chance and an opportunity for us to reinvent our city. But it’s going to take some effort and focus to do so.”

Optimism remains that Portland’s black eye will eventually heal and downtown will once again attract the tourists needed to bring the city’s hotel industry back.

But there are no illusions about how much hard work it will take to restore downtown Portland to its former glory.

There are positive signs.

Portland hotels were much busier than expected over Memorial Day weekend. Occupancy rates downtown are starting to trend up as we move toward summer. PDX just had its busiest month since the pandemic began.

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