Little Room at the Inn

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Hotel Occupancy Rates
The occupancy rates of Hermiston's seven hotels exceeds both the state and national averages.

[quote style=”2″]City’s Hotel Occupancy Rates Exceed State, National Averages[/quote]

It’s not as easy to find a hotel room in Hermiston as it used to be. The occupancy rate for Hermiston’s seven hotels was at 77 percent during the third quarter of 2013 – well above the national and statewide averages.

Continued strong growth in eastern Oregon’s largest city means hotel space is at a premium. A recent study shows that the highest demand is in the upper-end and lower-end market segments.

The Hermiston Planning Commission took a step Wednesday night to help lower the occupancy rate by approving a height variance for a proposed hotel in town. The Hermiston Code of Ordinances states that in a C-2 zone, no building shall exceed a height of 35 feet. Dale Sweeney requested the variance in order to build an additional floor on his hotel development. On Wednesday, the Planning Commission approved a height of 48 feet for Sweeny’s development. The variance approval applies only to Sweeney’s hotel. (On a side note, the 35-foot height limit was originally put in place due to the fact that the fire department – at the time – only had ladders that reached 35 feet.)

In July, Hermiston Mayor Dave Drotzmann formed a Hotel Task Force with members from the Hermiston Chamber of Commerce, the Hermiston School District and Umatilla County Tourism to find ways to maximize the economic impact of two developments expected to draw more tourists to Hermiston. The Kennison Field renovation early this year and the Eastern Oregon Trade and Event Center (EOTEC) are expected to further constrain the availability of hotel space within the city.

“Because of the foresight of the school district in renovating Kennison Field, that facility meets all of the standards to attract many sporting events to the area, and bring out-of-town visitors with them if our city can accommodate them,” said Drotzmann. “You combine that with the future opening of the EOTEC, and our community’s hotel space, which was already at a premium, will get even tighter.”

Hotels, motels, and RV parks in Hermiston pay a Tourism Promotion Assessment Charge for each room or space they rent per day. The task force was able to use this information to identify occupancy rates across the city. The data reported to the city on these tax returns showed that the average occupancy rate for hotels and motels in Hermiston through the first half of 2013 was 65.8 percent, which out-paced the state-wide average by more than 8 percent, and was nearly 19 percent higher than the average for eastern Oregon.

“This data shows that there is a high demand for hotel space overall in Hermiston, but the hotel-specific data shows that there is even higher demand for space in the higher-end hotel market segment,” said Hermiston Assistant City Manager Mark Morgan. “Tax returns for the summer show that the higher-end hotels in town were closer to 80 percent to 85 percent occupied on a daily basis.”

Data compiled from the City’s Transient Room Tax shows that, in addition to occupancy rates, hotel and motel revenue is on a record-setting pace so far this year. Tax returns reported to the City through September show that gross revenues for hotels and motels are up 20.9 percent compared to the same time frame in 2012.