The Tri-City economy fired on all cylinders in 2015 and the momentum should continue in the coming year.
That’s the forecast offered by some of the region’s top economists at the 17th annual Tri-City Development Council economic outlook, held Wednesday at the TRAC Center in Pasco.
Home prices rose 12.6 percent between 2011 and 2015, while the price of the average four-unit apartment property rose more than 21 percent over the same period, said Gayle Stack, a commercial broker with EverStar Realty. A constrained supply will keep prices on the rise and developers busy in the coming year.
The Tri-City economy is tracking with the state and nation when it comes to unemployment, reported Ajsa Suljic, regional labor economist for the Washington Employment Security Department.
Benton County’s unemployment rate dropped to 6.1 percent in November while Franklin’s stood at 7.4 percent. Both counties lag the state, which had a 5.3 percent unemployment rate.
Hospitality and agriculture leaders say their sectors are positioned for strong growth.
Corey Pearson of the Three Rivers Convention Center noted that visitor spending totaled nearly $411 million in the two counties in 2015, netting $15.3 million in taxes to local governments and supporting 5,560 jobs.
That’s a striking increase from 2009, when hospitality research firm Dean Runyan Associates calculated that visitor spending totaled $350 million locally and supported about 4,470 jobs.
Last year was unique, Pearson said. Four new hotels opened in 2015, adding 506 rooms and boosting the Tri-City inventory by 15 percent. The newcomers are SpringHill Suites by Marriott near the convention center, the Hampton Inn Kennewick at Southridge, Homewood Suites in Richland and the reopened M Hotel in Richland.
The construction surge was likely the result of developers playing catchup after the Great Recession caused projects to stall for several years.
Visit Tri-Cities, the agency that promotes the area to visitors and conventions, doesn’t expect another 15 percent boost in rooms in 2016. The Hampton Inn Pasco, a 120-room hotel under construction near the TRAC Center in Pasco, is slated to open in June.
We’re very, very bullish on the Northwest.
Steve Bannworth, vice president of vegetables business unit, Lamb Weston
Even with the surge of new rooms, occupancy rates held their own. Visit Tri-Cities is particularly pleased by one key metric — visitors booked 7.3 percent more rooms in the first 11 months of 2015 than the year prior, said Kim Shugart, senior vice president.
Pearson said the Tri-Cities’ emphasis on technology positions it well to compete for millennials, the tech-centered young generation that’s expected to command $200 billion in spending power by 2017.
The Northwest remains a shining star for agriculture, reported Steve Bannworth, vice president for Lamb Weston’s vegetable business line.
Lamb Weston, with nearly $3 billion in net revenue, has 12 plants in the Northwest and headquarters split between Boise and Kennewick. It is currently splitting off from its parent company, ConAgra Foods Inc., a move with major implications for its corporate activities, though spokespeople have said it won’t affect operations in the Tri-Cities.
The Northwest benefits from the availability of land and water and demand from emerging world markets that want U.S. foods. Lamb Weston considers growing sites around the world but has a soft spot for its home region.
“We’re very, very bullish on the Northwest,” Bannworth said.