Oregon Restaurant and Lodging Association Conference – Portland, OR
The ORLA Conference in Portland, OR was held at the Red Lion Jantzen Beach. The venue located on the Columbia River offered a large meeting space for the event as well as good break-off areas to have private discussions about investment interest.
The program of events began with a Sunday evening reception and dinner followed by primary content presentations and other networking sessions on Monday. The conference was well attended and the ORLA Administrators and Directors were excited about the good turnout.
Content was typical and included issues on labor, advocacy and encouraged participation of members. The most interesting portion was the STR Hotel Industry Overview and Oregon Lodging Trends available on our website at www.nwhotelinvestor.com. The takeaway from STR on Oregon was as follows:
- OCC may be near the peak with Portland at 77.6% – up 1.6% from the previous year
- ADR is growing but not as fast with Portland at $134.19 and up 5.4% from previous year
- RevPAR YTD through August was +7.2% in Portland going from $97 to $104
- July 2016 showed the most rooms ever sold in Oregon – 1,639,565 – WOW!
- OCC continues to grow in every Oregon Submarket
- Nationally there are more hotels under construction in 2016 versus 2015 with 67% falling in to the category of Upscale and Upper Midscale
- In Oregon, the rooms pipeline Under Construction changed 152% from 2015 to 2016 with 2006 rooms currently under development versus 886 last year
- In 2016 Oregon has shown a RevPAR Growth of 8.9% and is expected to have RevPAR Growth of 6.8% in 2017
As always, the networking events gave us a chance to meet some familiar faces and a few new ones as well. We met with some of Oregon’s hotel industry leaders and other professional servicers to discuss the market and amazing growth we have seen in our region. Overall, the impression from those in the industry is that the cost of doing business is on the rise. Developments are costing more money and taking more time throughout the state of Oregon. Most owners seem to have no interest in selling and have money to buy assets even though they are not enthused to pay top-tier pricing with an expected flattening of revenue on the horizon. More specifically, those owners that we spoke with are more excited about completing their current projects than buying existing assets. Although the cost of construction has risen, it seems to be a better approach to build at this point versus buying an existing asset as prices on a per key basis are exceeding the price it costs to build new.
As a local service provider specializing in the purchase and sale of hotel and land projects in the Pacific Northwest we were happy to be in attendance and to touch base with our local professionals about current affairs, concerns, and projections for our industry.
