Travel spending on the rise in Whatcom County

What do increased consumer confidence, a strong Canadian dollar and expanded service at Bellingham International Airport have in common? They...

When Michael Herzog and a team of other investors bought Hotel Bellwether in 2007, travel spending in Whatcom County was at an all-time high of about $454.7 million.

The following year that amount grew even more — to $479.4 million. Then the recession hit and travel spending in the county went south — 2009 levels fell below 2007 levels. That drop was definitely felt at the Bellwether where business plunged, said Herzog, who is general manager at the hotel.

“In 2009 through 2010 it went down tremendously,” Herzog said.

Hotel Bellwether saw a loss of every type of client, but the largest decline was in corporate clients — without corporate clients, the hotel stays fairly empty during the week, Herzog said.

Not only did the Bellwether see a drop in overnight clients, fewer local businesses rented out meeting rooms there. A lot of local businesses were forced to cut holiday parties to save money and sometimes employees, Herzog said.

“We really suffered from holiday parties,” he said.

To entice customers, the hotel promoted itself more aggressively and tried to appeal to travelers by offering package deals and discounts throughout the year. The Bellwether weathered the recession, and in the second half of 2010, business started picking up again.

And how’s business this year?

“Even better than 2008,” Herzog said — it has increased more than expected and more than average. “We will have the best year since we came.”

And Herzog expects that upward trend to continue. Now, instead of offering specials throughout the year, Herzog has to be more selective about when to offer deals.

More money, more travel

Tourism usually bounces back before other industries, said Loni Rahm, president and CEO of Bellingham Whatcom County Tourism. Americans see travel as a right — that’s especially true of Pacific Northwesterners and Whatcom County tourism is heavily supported by regional travelers, she said.

While tourism in Whatcom County did drop between 5 and 6 percent in 2010 over the previous year, that decline represents a far smaller economic loss compared with many other places in the state.

Whatcom County, which ranks fifth in the state for visitor spending revenues, fared better because its primary visitor market — from Seattle and Vancouver — is relatively close in proximity. A significant portion of visitors come from 100 miles north and 100 miles south, Rahm said.

“They are coming here because we offer a recreational and cultural escape,” Rahm said, adding that information collected shows that a majority of visitors come to the area for outdoor recreation, cultural amenities and shopping.

And shopping is starting to bring an increasing amount of revenue to Whatcom County.

Sales tax for Whatcom County is getting back up to pre-recession levels, said Ken Oplinger, president and CEO of Bellingham/Whatcom County Chamber of Commerce and Industry. Canadian travelers are, in large part, responsible for that increase.

After 9/11, fewer people traveled across the border into Washington, but border traffic is picking back up. Border traffic is far higher than it was before the recession, Oplinger said, and is comparable to levels in the late 1990s.

British Columbia accounts for about 23 percent of Whatcom County visitors and that number is growing because of two main factors: the strength of the Canadian dollar and expanded nonstop flights out of Bellingham International Airport, Rahm said.

A new customer profile

At Hotel Bellwether, Herzog is seeing more Canadian travelers.

Canadians are an important part of the Bellwether’s customers base, Herzog said. And it’s not just Canadians; the Bellwether has seen an increase in international travelers in general.

Over the last two years, Hotel Bellwether has had more customers from Europe, many of whom are corporate clients visiting aerospace manufacturer Heath Tecna or Sterling Insurance, which is a subsidiary of German-based Munich Re.

After their business trips, many of those corporate clients end up coming back to Bellingham for personal vacations, Herzog said.

All of these visitors contribute significantly to the local economy, Rahm said.

Overnight visitors who stay in commercial lodging properties spend an average of $352 per day and those who stay with friends, family or in second homes spend an average of $130 per day. Tourism related jobs make up about 6 percent of jobs in Whatcom County, Rahm said.

“It is a far more significant part of our economy than most people realize,” Rahm said.

In 2009, the most recent year for which numbers are available, direct traveler spending in Whatcom County generated about $33 million in state and local taxes.

Visitor spending is especially good for the economy because it’s outside money, Rahm said.

“That is pure economic vitality because we aren’t moving money around in a circle,” she said.

Rahm expects that tourism revenues will continue to grow in 2011, increasing slightly over 2010 levels, and so too do Oplinger and Herzog.

“The future looks bright, if you ask me,” Herzog said.

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