Business from travelers is off for restaurants and hotels here, with numbers down or flat across the board. Most property owners and managers, however, say that although times are tough, they're grateful that business isn't worse, and they anticipate a fairly steady year.

Meanwhile, they're seeking to cut costs where they can, by trimming staff and pulling back on regular facility upgrades, and are trying to be more aggressive about attracting the business brought in by conventions and sporting events here.

Spokane Regional Convention and Visitors Bureau President and CEO Harry Sladich says that despite a dip in hotel occupancy here, the Spokane market is the envy of most other markets in the Northwest.

"We're off about 3,000 room nights in Spokane through February, which is a speck compared with other places," Sladich says. Spokane County as a whole is down about 5,000 room nights for the first two months of the year, out of a total of 420,000 room nights available here for that period, he says.

"I think the Northwest has not been impacted quite to the extreme that other markets have been hit by this recession," says George Schweitzer, senior vice president of hotel operations for Spokane-based Red Lion Hotels, which operates two hotels with a combined 645 rooms here, as well as nearly 50 other properties in nine western states.

A recent Smith Travel Research Inc. hotel survey bears that out. It says that while the average occupancy rate at hotels here is down about 3 percent from last year through February, the average occupancy rate in King County is down 17.5 percent for the same period. For 2008, hotel-motel receipts in Spokane County were down 0.74 percent, but receipts in the city of Spokane rose 5.72 percent compared with 2007.

Still, there has been a drop-off in business here, and Red Lion has responded, combining management at its two properties here, its Hotel at the Park and the River Inn, located a few blocks apart on the north bank of the Spokane River near downtown. It also has reduced its staff, though Schweitzer declines to say by how much.

Lynnelle Caudill, general manager of the Davenport Hotel and Tower here, says that she's seeing a number of groups still booking rooms at the 611-room downtown hotel complex, but in smaller numbers.

"If a group generally has a 400-person conference in the spring, they might only bring 300 this year," Caudill says. With the recession, organizations all over are freezing travel budgets, she says.

Sports, religious, and social groups still seem to be meeting, though there has been some reduction in the number of rooms they end up booking, Schweitzer says. Meanwhile, Red Lion has noted a dip in corporate business and frequent individual travelers.

Travelodge Hotel, which has 80 rooms and sits across Spokane Falls Boulevard from Spokane's convention facilities, also has seen a drop in business travel.

"Weekends are generally pretty good for us, but we have noticed a decline in our corporate business," says Meredith Rainville, Travelodge's general manager.

Sladich says business travelers typically are the first to pull back in a downturn.

"Businesses in general are saying, 'Do you really need to take that trip?'" Sladich says. He says convention business, such as a music educators' conference that met here for the first time recently, has helped buoy room nights during the first quarter.

Contributing to a sluggish first quarter here was a winter with record snowfall, those in the industry say.

"The first three weeks of the year, we had no business," Caudill says.

The weather challenges began in December. Caudill recalls Christmas Eve, during which much of downtown was darkened by a power outage, including the Davenport Hotel's main hotel. Guests were moved to the Davenport Towers, which is on a different power grid.

"January was pretty grim for everybody," Rainville says, but adds that overall this year so far, Travelodge's business is down only 2 percent or 3 percent.

For the Davenport, it appears that leisure business is about flat with last year, which Caudill says in the current economy is a positive sign.

"We're glad it's not down," she says.

Any slowdown in hotel occupancy tends to lead to a similar dip in restaurant activity, both within hotels and at restaurants that rely on business from hotels and conventions.

"If we are really busy, then our restaurants are busy," Caudill says, adding that the Davenport's restaurant facilities are propped up in part by local groups.

William Webster, owner of Isabella's Restaurant & Gin Joint downtown, says business at that restaurant so far this year is down about 25 percent from last year. He says about 35 percent of the restaurant's business is from hotel guests and conventioneers, and that numbers have been soft at some recent events.

"It has shown us that we really need to appreciate every guest who walks in the door. The days of taking everyone who walks in the door for granted are over," says Rob Lady, general manager of C.I. Shenanigan's, which is nestled along the Centennial Trail near the DoubleTree Hotel and the convention facilities.

Lady says that about 65 percent of C.I. Shenanigan's business is from local banquet business and groups, which helps when travel business is down.

Dealing with a tight market

Creativity and flexibility are the keys to weathering a recession, Schweitzer and others say.

"When you get into an environment like this, it forces creativity. It's a cleansing process for organizations to look at how they are doing business and to manage more effectively," he says.

Red Lion essentially is operating its two Spokane hotels as one facility, he says. "We've merged the management team and consolidated so we have one management team overseeing both properties. It allows us to shift inventory and manage more creatively," Schweitzer says.

Other hotels are looking for ways to keep their rooms updated while scaling back on projects, says Travelodge's Rainville.

"This year, because of the downturn, they're not spending a lot of money on upgrades," and instead are focusing more on things such as buying new bedding rather than bigger outlays such as for replacing carpeting, Rainville says. "They are also paring back on staff and services, trying to save money where they can."

Restaurants have sought to cut costs, too. Webster says he's had to reduce staff at Isabella's some, down to 17 people, compared with 22 last year. Recently, he sold his interest in another restaurant, 360, located at 1 N. Post, to his partner in that venture, Michael Ravens, in order to refocus his efforts on Isabella's and a nearby nightclub he owns called Zola.

"I didn't want to stretch myself too thin, and with the economy the way it is now, it was a smarter move for me," Webster says.

Restaurant and hotel operators here say the CVB's promotions of Spokane facilities aids their businesses' bookings.

"To the CVB's credit, they run a local campaign to encourage people to hold meetings locally that has made an impact," Caudill says.

C.I. Shenanigan's has tried to prepare for a change in consumer behavior, Lady says.

"We tried to be extremely proactive," when it was clear there would be a slowdown, Lady says. "With less discretionary income, people are using more discretion."

The restaurant revamped its menu last year in anticipation of a pullback in consumer spending, Lady says. It now offers items such as sandwiches and dinner salads that appeal to the cost-conscious.

"We've had to tighten hours of staff, but have kept our team mostly intact," Lady says.

Despite a tightening that's occurring in the markets for restaurants and hotels, Sladich says Spokane's hospitality sector benefits from the fact that it's not overbuilt. He says that other than the Davenport Tower opening in 2007, about the same time the Ridpath Hotel closed its doors, there haven't been many rooms added to the hotel inventory here, and hotel room rates still are competitive with those in other markets.

Last year, a Seattle-area developer announced plans to build a 79-unit La Quinta Inn & Suites east of Airway Heights, and the Kalispel Tribe of Indians is planning a 350-room hotel as part of an expansion at its Northern Quest Casino on the West Plains. In Spokane, the owners of the former Burgan's furniture store plan to develop a 90- to 100-room hotel there. (See story, page one.)

Schweitzer says the hotel market here could be somewhat overbuilt for current conditions, but if that's the case, the market will correct itself, making it more difficult for developers to get new projects under way here, he says.

"Markets have a way of balancing themselves out. If they're saturated, it makes it difficult to get financing," Schweitzer says.

Caudill says the Davenport is expecting slight growth in business volume this year, but anticipates that most of that will happen in the latter part of the year.

"We have a stronger convention year, with more group business booked at the Davenport compared with last year; that's what's going to help drive that," she says.

Says Lady, "A big portion of what's going to happen for us is weather-related." He says C.I. Shenanigan's seeks to nab walk-by traffic from the Centennial Trail as the spring and summer progresses.

Lady says C.I. Shenanigan's is among a host of facilities here that are looking forward to some bigger events in the coming year, like the National Veterans Wheelchair Games and, early next year, the U.S. Figure Skating Championships.

Caudill says the Davenport expects a lot of business from the Wheelchair Games in July, and has made some modifications for accessibility in preparation for guests affiliated with that event. Still, how the year will end up remains to be seen, Caudill and others say.

Schweitzer says he expects conditions here to remain about the same for the rest the year.

"There's nothing that suggests it's going to get that much worse, yet the West Coast and the Northwest have always been the last in and the last out when it comes to economic recessions," he says.

"I think the end is not clearly in sight," he says.

Rainville says convention business is looking pretty good for the year, which she hopes will help buoy the Travelodge.

"The convention business is actually going to be pretty good. That affects us directly," she says. Leisure travel is still an unknown however, and Rainville says how gas prices shape up for the summer vacation months will make a difference, but she thinks things likely will stay relatively steady.

"People still want to take their vacations," she says.