Harry Sladich surprised civic boosters here when he announced recently he plans to resign as president and CEO of the Spokane Regional Convention and Visitors Bureau to take a job in the private sector, but he says he's seeing a lot of encouraging signs for the recession-hammered hospitality and tourism industries here as he prepares to depart.

As of February, a total of 16,212 Spokane hotel rooms had been booked for coming years for group, or convention-related, use, up more than 460 percent from the meager 3,480 reserved rooms that were on the books in February 2009, Sladich says.

"I expected a rebound, but I didn't expect that," he says. "That's telling us that meetings are back, that it's thawing."

Providing additional reason for optimism, he says, are the 146 conventions and meetings that are scheduled so far here this year. That's down from 187 last year, but four or five of the conventions are large ones, with several coming to Spokane for the first time, so overall room night and delegates numbers should be up, he says.

Sladich says he's enthused, too, by indicators that Spokane will begin to see a resurgence this year in non-convention visitors, such as families from outlying areas, who are "our bread and butter," accounting for 80 percent or more of overall tourism revenue here.

Hotel occupancy rates and the demand for rooms were up an average 3.6 percent and 8.7 percent, respectively, through February, he says. Two other closely watched indicators—average daily rate and revenue per available room were up 1.5 percent and 5.5 percent, respectively, Sladich says, adding that his peers in other cities are stunned that Spokane County is showing such gains while their metropolitan areas are not.

"We're on a remarkable trend here, and 2010 is just going to rock the house," Sladich gushes. "We're forecasting 4 million visitors to Spokane County this year," which would be back roughly on par with 2007 and 2008 figures after dipping around 8 percent last year.

The hospitality and tourism industries were slammed far worse nationally by the recession that bottomed out last fall than they were by the downturn after 9/11, when patriotic fervor helped spur a rapid recovery, Sladich says.

The downturn here, though painful, was far less severe than in some other markets, Sladich says, partly because Spokane isn't as dependent on single "demand generators," such as corporate incentive travel and conventions, for revenue as those markets are.

Locally last year, occupancy was down 5.5 percent, the average daily room rate fell 2.2 percent, revenue per available room was down 7.4 percent, and demand was down 4 percent from the previous year, he says. He says many other urban markets, such as Seattle and Salt Lake City, experienced double-digit declines.

Corporate incentive travel, the latter intended to recognize or reward top-performing employees, was one of the hardest hit markets last year, he says. That type of travel came to a near halt for a time due to widespread public criticism of lavish trips by employees of ailing publicly traded companies that were seeking or had received federal bailout money.

"The repercussion of that went far past where it should have," Sladich asserts, and he says economic uncertainty also caused organizations to postpone firming up convention plans, which created pent-up demand that now is beginning to be released.

Referring partly to the variety of events planned here this year, including the first couple of shows in a Best of Broadway Series announced last month, he says, "2010 will be probably one of the best years we've seen because of all these demand generators."

Sladich, 48, is leaving the CVB after five years there to become the executive vice president of sales and marketing for Spokane-based Red Lion Hotels Corp. He earned $122,000 a year at the CVB, where his last day will be April 23. Red Lion says in a regulatory filing that it will pay him an annual salary of $165,000, beginning May 3, and will grant him restricted stock units valued at $24,750, also on that date.

Long hospitality career

Sladich is a 31-year veteran of the hospitality industry. He began working at age 17 at the Travellodge hotel near downtown that later became the Red Lion River Inn, then worked for 10 years at the Sheraton-Spokane Hotel downtown, now called the Doubletree Hotel Spokane City Center, where he says he worked in all facets of the hotel operation. After 11 years with another company, he worked for five years at Spokane-based Sterling Hospitality Management as vice president of sales and marketing and helped develop and expand that company's hotel properties. He then worked briefly as operations manager at the Hotel Lusso here for about a year before joining the CVB in the spring of 2005.

Leaving that nonprofit organization "just wasn't in my consciousness. I wasn't thinking about it," he says, until Jon Eliassen, Red Lion's president and CEO, and George Schweitzer, its executive vice president and COO of hotel operations, made him an offer too sweet to pass up.

"They're excited about a new direction for Red Lion," which in turn has opened up an exciting opportunity for him, Sladich says.

"I had a lot of stuff I still wanted to get done here, so I'm conflicted," he says. He adds, though, that, "The upside of Red Lion is phenomenal, so that just wasn't something I could say no to."

Eliassen had said in the company's annual earnings report released in February that it plans this year "to implement a strategy to expand the Red Lion brand through a refocused franchising effort across the Western states."

Red Lion's hotel network currently is comprised of 45 hotels located in eight states and one Canadian province, and includes nearly 8,700 guest rooms and more than 430,000 square feet of meeting space. It also owns and operates an entertainment and event ticket distribution business. Red Lion reported a net loss of $6.6 million for all of 2009, sharply higher than a net loss of $1.7 million the prior year.

Its total revenues of $165.4 million last year were down nearly 12 percent from $187.6 million in 2008.

Reflecting on his time with the CVB, Sladich says he's enthused by the strong marketing team now assembled there that has helped grow national visibility for the Spokane region and is proud of the accreditation the CVB obtained from the Destination Marketing Association International—a feat achieved by fewer than 100 bureaus worldwide.

He says he also is pleased with the gains made by the organization with the help of consultants who were brought in early during his tenure to provide "third-party verification that we're headed in the right direction and doing the right things."

Additionally, he says he feels good about the stronger partnerships the CVB has forged with other organizations, from Greater Spokane Incorporated to the Spokane Public Facilities District.

Citing, in particular, efforts to repair frayed communications with the PFD, he says, "What came out of that was probably one of the tightest relationships you've ever seen. What we created in Spokane, Wash., is now being used across the nation."

Overall, in regard to his efforts to strengthen collaboration here, he says, "I think we breathed some passion into other people."

One of his biggest lingering frustrations as he prepares to move on, he says, is the ongoing battle the CVB has to fight to protect some of its voter-approved funding from being diverted to uses not related to destination, or tourism-focused, marketing.

The CVB, which employs 25 people, has a $3.6 million budget. It gets about $2.9 million of its revenue from a combination of a $2-per-guest-per-night tourism promotion area (TPA) fee collected from hotels here and a state-authorized lodging tax of 2 percent on occupied hotel rooms, which together generate about $5 million in Spokane County. Portions of those proceeds also go to the Spokane Regional Sports Commission and other groups.

"There is a constant assault on this money (by jurisdictions or organizations that covet it). People peek over the fence. I would say 25 percent of my time is spent protecting my money, and that is dysfunctional. We have to go (to the county and the cities of Spokane Valley and Liberty Lake) every year with our hat in our hand to make a pitch to get our money again," Sladich says.

One of the latest attempts to latch onto some of that money involved Association of Washington Cities-supported legislation introduced in this past legislative session that would have allowed cities to expand the uses of lodging tax proceeds, but that measure failed, he says.

The reason why various groups seek to divert those funds is that "they don't understand the science of destination marketing," he says, adding that he's not arguing the CVB should get all of the tax proceeds, but rather just its fair share.

Citing a consultant's report, he notes that visitors to Spokane County spent an estimated $893.5 million in 2008, generating an estimated $61.9 million in state and local taxes, and says, "I know we are the largest contributor to that," which he argues makes the money spent by CVB a great investment.

He acknowledges that another longtime frustration has been the inability of many civic and business leaders to see beyond political boundaries when seeking to woo tourists, and to understand that, to visitors, such borders and geographical distinctions mean nothing. Still, he says, such parochialism is less severe here than it is in many other urban markets.

"We've come a remarkable distance, but it's still there," he says.

Sladich says he wouldn't have taken the job with Red Lion if it hadn't allowed him to remain in Spokane, which he loves, and he says his interest in continuing to grow the tourism industry here won't cease.

"I'm not done," he says. "In some ways, I'll have more influence because I'm in the private sector now."