New hotels opening in Tri-Cities — even though industry won’t recover for years

Several new hotels have opened in the Tri-Cities this summer, even as the industry continues to be hammered by the COVID-19 pandemic.

Just in recent weeks the WoodSpring Suites Tri-Cities opened with 120 extended-stay rooms in Richland and the former Red Lion Hanford House in Richland is wrapping up a $10 million rebirth as a Holiday Inn.

But hotel and travel industry experts are expecting a full recovery will be a long time in coming.

“There are predictions of recovery of 75 to 85 percent by the end of 2021. But a full recovery to 2019 levels may not happen until 2023,” said Michael Novakovich, president and CEO of Visit Tri-Cities.

And some analysts are saying the industry may not be whole again for four years, he said.

This summer hotel room rentals across Tri-Cities showed a slight uptick compared to the spring when the new coronavirus was first tightening its grip.

But Labor Day weekend occupancy rates were down 80 percent from last year, said Taran Patel, manager of A-1 Hospitality Group based in Pasco.

The paltry number of bookings in Tri-Cities was no different than across the nation.

The American Hotel and Lodging Association reported that only 14 percent of hotel rooms in the U.S. were booked over Labor Day weekend. It also reported that in markets near hotels, in general only 45 percent of rooms have been getting bookings, and urban markets are ever lower at 38 percent.

“As a result of the significant decrease in hotel room demand, the average daily rates are about 35 percent below last year,” Patel said.

His family-owned company A1-Hospitality owns several hotels in Tri-Cities, including the Courtyard by Marriott and the Holiday Inn Express — both in Pasco, along with others throughout the Northwest and one in Texas.

Patel said as the school year has started, there’s an expectation that leisure travels will further drop off, then plateau over the fall.

“We anticipate a gradual resumption in corporate travel as companies begin feeling comfortable and gain confidence with sending their team members back on the road,” he said. “Another variable will be when indoor large group events and meetings will be permissible.”

But business travel this summer has been all but nonexistent, Novakovich told the Herald.

Tri-Cities businesses lost about $29.5 million worth of revenue this year when events from sports competitions to conventions canceled because of the COVID pandemic, said Novakovich.

That’s money that not only would have been spent on lodging, but also at restaurants, gas stations and grocery stores.

Plus, it’s a loss of tax revenue that supports services such as our police and fire departments, he said.

“We are incredibly worried about the fall and what the drop in demand will mean for the industry and the millions of employees we have been unable to bring back,” Chip Rogers, the president and CEO of the lodging association said in a news release. “The job loss will be devastating to our industry, our communities, and the overall American economy.”

Hotel industry jobs

There was a loss of 80,200 jobs in the accommodation and food service industries across the state from July 2019 compared to this past July, according to the Washington State Employment Security Department. Of those, 18,000 job losses were in the lodging industry.

In Tri-Cities, Benton County has a 10.6 percent overall unemployment rate in July with 11,758 people unemployed, and Franklin came in higher at 11.5 percent with 5,315 unemployed.

While local unemployment rates are not published at a micro levels by the accommodation sector, Asja Suljic, regional labor economist, said that five months of big losses and revenue are going to be tough to recover from — even if hotel employees are rehired.

“They still are opening up slow with many restrictions,” she said. “They have limits on how they are able to serve their guests and a lot of people are hesitant to travel because of restrictions such as the inability to utilize pools.”

With the lack of business travel, it adds another component to the equation.

“Room capacity is one story,” she said. “The rental of the property for meetings and business travel is another.”

Gatherings remain limited in Benton and Franklin counties, which also eliminates wedding receptions and other large events.

New hotels opening

▪ WoodSpring Suites Tri-Cities just opened in Richland at 1370 Tapteal Drive, along Highway 240.

The 120-room extended stay hotel that had been under construction since last year just north of Columbia Center mall.

The $7 million project brought in another long-term option for business travelers or those waiting on housing.

The hotel offers three room types, all with kitchens equipped with full-size refrigerators and freezer, dishwasher, stovetop and microwave. Basic cooking and serving tools along with dining table and chairs also offer an ease for those away from home.

The hotel offers weekly and nightly rates in addition to monthly rates and can be reached at 509-717-2011.

▪ A 94-room Comfort Suites in the Sourthridge area of Kennewick started taking reservations June 1.

The hotel off Highway 395 sits at 3703 Plaza Way near Southridge High School and Canyon Lakes Golf Course.

The hotel features a 24-hour pool and spa, fitness center, meeting space and a hot breakfast and evening cookies.

The rooms feature complimentary high-speed WiFi, secured hard-wired internet access along with a lighted desk area, USB plug-ins and sofa sleepers.

“The hotel is premiering during a time when hospitality means respecting space while providing a caring and clean hotel. We know our guests will feel safe and comfortable while enjoying our upscaled features and Tri-Cities hospitality at its finest,” said Tonya Dundas, vice president of operations with Spokane-based Hospitality Associates.

▪ The Red Lion Hanford House in Richland is open and finishing a $10 million renovation and rebranding as a Holiday Inn.

The hotel will formally open as the Holiday Inn Richland on the River by the first week in October, local developer Gurbir Sandhu told the Herald.

The hotel on busy George Washington Way will no longer bear the historic moniker “Hanford House.”

The Hanford House was built in 1970 and sits between John Dam Plaza and the Columbia River at 802 George Washington Way. It took over the former site of the Desert Inn on 804 George Washington Way, which was torn down in 1968.

Hanford House Hospitality LLC, led by Sandhu, bought the 149-room Red Lion two years ago for $7.5 million.

With nine meeting rooms totaling 10,000 square feet, it has long remained a popular location to hold conferences. The largest space can hold up to 350.

If you know of a retailer, restaurant, coffee shop or other business that is opening, closing, expanding, remodeling or changing its focus, send an email to reporter Allison Stormo at astormo@tricityherald.com.

This story was originally published September 14, 2020 at 5:00 AM.