Travelers slow to return to downtown Portland hotels; concerns linger over city’s reputation

Tessa Peterson has become accustomed to working at the front desk at The Hoxton over the last year, balancing that role with her job as the Portland hotel’s general manager. Its restaurant manager has similarly stepped in to wait tables at Tope, the only restaurant at the Old Town hotel currently open.

They’ve had to fill in ever since the hotel laid off more than 70% of its staff as restaurants closed and tourism plummeted early in the coronavirus pandemic.

Leisure travel has slowly started to rebound and the hotel is planning to hire back staff in anticipation of increased travel this summer. But only about 50% to 70% of the hotel’s rooms are filled on weekends, and the occupancy rate can drop as low as 10% during the week.

Before the pandemic, The Hoxton typically filled 9 out of every 10 rooms. Peterson believes it will take years for occupancy to rebound to pre-pandemic levels, especially if business travel is slow to return.

And even as tourism picks up, she and other hoteliers worry that travelers may avoid the central city if officials don’t act quickly to clean up downtown and repair the reputational damage that Portland suffered in the aftermath of last summer’s civil rights protests.

“I’m optimistic when I’m looking at 2021 compared to 2020,” Peterson said. “There’s hope. It’s not all doom and gloom, which is the first time in probably 12 months I’ve felt that way. … But I think there’s still a lot of trepidation about whether downtown is a safe place to be and I think that’s going to impact tourism.”

Tourists slow to return to Portland

The number of people seeking hotel rooms in Oregon plummeted in the early days of the pandemic. That nosedive was particularly acute in Portland where occupancy plunged by more than 80%.

Tourism has rebounded significantly in much of the state, especially in areas close to Oregon’s outdoor attractions.

During the last week of February, hotel occupancy in Southern Oregon was actually up 29% from the same period a year ago — just before the pandemic hit — according to data from Travel Oregon. Occupancy was up 8.6% on the Oregon coast for the same week in February.

In Portland, though, travelers have been slow to return.

Portland hotels averaged 35% occupancy in February, down 47% from the year prior, according to Travel Portland, which promotes the city’s tourism industry.

Downtown Portland and the surrounding area continued to suffer the most with hotels in the central city averaging 25.5% occupancy, down nearly 63% from the year prior. Occupancy rates in the central city increased only slightly in March, according to preliminary estimates.

Those occupancy rates don’t take into account hotels that remain closed. There were 15% fewer hotel rooms available citywide and nearly 23% fewer rooms available in downtown Portland in February as compared to a year prior.

Those that were open were making significantly less per room with the city’s average daily room rate down 26%.

With travelers avoiding downtown, hotels on Portland’s eastside have fared relatively well. They were nearly two-thirds full last August, more than double the occupancy rate downtown. Airport hotels and those at Jantzen Beach were also somewhat fuller than in downtown.

Nick Pearson, general manager at The Jupiter hotel on East Burnside, said those areas benefited, in part, from having airline crews and other companies shift their workers away from downtown hotels. He said travelers also appeared to shift away from downtown last summer as the city drew negative national media attention as demonstrators and federal and local law enforcement clashed during nightly protests.

“We actually had a pretty good summer, all things considered,” Pearson said. “Occupancy was obviously still way down and rates were down even further, but just not being in downtown Portland last summer, the eastside and the airport and even Vancouver kind of benefited from the unrest in the city center and the Portland narrative.”

It’s not just Portland, though. Hotels in downtowns elsewhere have faced similar declines amid the pandemic.

Occupancy rates in February were down 73% in downtown Seattle and 70% in downtown Vancouver, British Columbia compared to a year earlier.

“While occupancy and rate have been depressed in Portland, we’re doing better than a lot of major markets or right in line with most,” said Steve Halasz, Travel Portland’s research director.

Demand for hotel rooms is slowly growing

Katherine Durant, CEO of Provenance Hotels, which operates six properties in downtown Portland, said she is cautiously optimistic that downtown hotels would see a bump in business in the coming months.

The hotel group saw an uptick in bookings at Hotel Lucia in the final two weeks of March. That coincided with a surge in air travel nationally, and through Portland. Passenger volumes at Portland International Airport jumped 66% from February to March.

Provenance closed all six of its downtown Portland hotels early in the pandemic. It reopened three later in the year and then reopened The Woodlark earlier this month, opting to reopen specific properties only when it felt it could lose less money open than closed.

The hotel group plans to rehire employees and reopen Hotel deLuxe in May in anticipation of heightened interest in summer travel, although the group isn’t expecting to turn a profit anytime soon.

“We have a plan, we have a budget for it,” Durant said. “It’s not fun, it’s painful, but we’ll make it through.”

In December, The Benson in downtown Portland temporarily closed, shutting its doors for the first time in its 107-year history. The hotel reopened in February but customers have been slow to return. Managing director George Schweitzer said the hotel averaged under 20% occupancy in March.

Still, future booking trends give Schweitzer some hope for the summer. While he said many hotels have learned to operate more efficiently during the pandemic out of necessity, he said increased occupancy would allow him to start bringing staff back. Only about 25 staff members are currently working at the hotel, down from about 165 before the pandemic.

“Booking trends are positive, they aren’t extraordinary, but they are moving in the right direction,” Schweitzer said. “Our summer months are going to be significantly better than we are now, not comparable to 2019, but we’ll probably see occupancy in the 50% range for the downtown hotels.”

The state of downtown remains a concern

There has been a notable uptick in foot traffic downtown recently as the state has ramped up its vaccine rollout, and restaurants, bars and businesses have reopened. Yet the central city still feels relatively empty with the majority of downtown office workers still telecommuting.

But even as office workers return and the pandemic recedes, hoteliers worry that the state of downtown Portland may continue to deter tourists.

Many buildings and storefronts around downtown still have boards covering their windows, a product of the property damage that occurred during nightly protests last summer and occasionally since then. And the number of people living in tents along sidewalks in downtown, and especially in Old Town, has spiked dramatically during the pandemic. Trash and graffiti around the city core have increased substantially, too, despite city and volunteer cleanup efforts.

Tourists have taken note.

Peterson said one hotel guest at The Hoxton questioned after her stay whether it would be safe for her daughter to move to Portland for college. Schweitzer said a couple from Washington who regularly travels to Portland sent him a letter after a recent stay, saying they had stepped over human waste on the sidewalk and been unable to walk a block without seeing businesses boarded up. Schweitzer said they wanted to know what happened to the city they had loved.

In November, another woman and her daughter who came to Portland to visit colleges drove all the way up to the loading zone at The Society Hotel in Old Town before cancelling their reservation from the car.

“Upon arrival seeing the tents lined up on the sidewalk next to the hotel, we were shocked and did not feel comfortable getting out of the car,” the woman wrote in an email to Society Hotel co-owner Jessie Burke.

Burke copied Mayor Ted Wheeler and other city officials on her reply to the customer, saying she and other business owners had been pleading for years for the city and county to find an empathetic solution for those in Old Town experiencing homelessness and dealing with addiction and mental health conditions.

“I’m sorry on behalf of the City of Portland and Multnomah County,” Burke wrote. “While my job is to host visitors and provide excellent hospitality inside my doors, that those responsible for making this City and County livable and worth visiting aren’t holding up their end of the bargain in Old Town.”

An uncertain recovery

An October survey by Travel Portland found more than a third of potential tourists considered the city an unappealing vacation destination. That’s slightly more than found it appealing and a dramatic decline from the start of 2020.

However, in the same survey, 75% of respondents who said they had previously visited Portland said they were likely to visit again. Travel Portland President Jeff Miller said those results were heartening. He remains optimistic that tourists will return to Portland — including to downtown — as the pandemic recedes.

While Miller said business travel is unlikely to substantially return this year, he said it could rebound quickly in 2022 and 2023. The city had 61 conventions booked for those years as of December.

Miller said Travel Portland is also focused on enticing leisure travelers to return to Portland this year through targeted marketing campaigns aimed at tourists on the West Coast and those who have visited Portland before.

“We really want to talk to the people who love Portland,” Miller said. “We’ll save for another day changing the hearts and minds of those people who are a little worried. We want to bring back our fans who love us already and that’s going to be our focus for now.”

Burke said the more government officials and travel organizations can do to build confidence among travelers, the better. But she said she hasn’t seen much in the way of confidence campaigns aimed at drawing in travelers.

The Society Hotel closed temporarily in December because it was losing roughly $80,000 a month to stay open with occupancy hovering around 10 to 15%, according to Burke. It recently secured a Paycheck Protection Program loan, which will enable the hotel to reopen in May. Burke said she is hopeful that will coincide with greater confidence around travel.

“We’re about to do our second reopening,” Burke said. “I was telling some of our elected officials, eventually you run out of money. You can’t sustain three reopenings in your lifetime. We’re just trying to be as careful as possible and see if we’re successful.”

Jamie Goldberg | [email protected] | @jamiebgoldberg