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Betting on Occupancy

With hundreds of hotel rooms being added across the valley, the Flathead heads into 2016 with hopes of filling them year-round

By Molly Priddy
Construction continues on the hotel in Columbia Falls on Feb. 26, 2016. Greg Lindstrom | Flathead Beacon

Two years ago, in the spring of 2014, the Flathead Valley was poised to have a massive tourism year: people in the U.S. and Canada felt good about spending again, the wildfires would remain largely inactive, and it would end up as a good snow year.

That summer, nonresident travelers spent $3.8 billion in Montana, Flathead County bringing in more than $668 million, topping Gallatin County for the first time in years.

It was a huge summer in terms of spending and visitation, giving summer 2015 a hard act to follow. Last summer was marred with plumes of wildfire smoke and weeks of unbroken heat, and parts of Glacier National Park, including Going-to-the-Sun Road, closed down at times.

Still, even with the headwind, it ended up a solid summer.

“Even with some of the difficult environmental factors this last summer, we were down 2 percent. That’s still a really, really good quarter,” Whitefish Convention and Visitors Bureau Executive Director Dylan Boyle said. “It beats all other quarters since we’ve started keeping track, except the summer of 2014.”

Ever since the recession destabilized the valley’s economy, tourism has taken over as the largest basic industry in the Flathead, accounting for 19 percent of earnings in the county from 2012 to 2014, according to the Bureau of Business and Economic Research at the University of Montana. Nonresident travel is expected to grow about 3 percent per year from 2015 to 2018.

Glacier Park International Airport set passenger records in nearly every month in 2015, and the park itself set a record with 2.36 million visitors. The average traveler in Glacier Country spent nearly six nights on vacation, and stayed in hotels and motels for 33 percent of the time.

With more people coming to vacation or hold business in the valley, the question of lodging – where would all these people stay? – was answered largely last year by the creation of hundreds of hotel rooms.

There are already about 1,200 guest rooms in Whitefish, Boyle said, not counting personal rentals such as Airbnb or VRBO.

In January, there were 325 new hotel rooms under construction across the valley. In Whitefish, the opening of the Firebrand Hotel and the new Hampton Inn in 2016 will add 161 rooms, an increase of 13 percent, Boyle said. The new $4.5 million hotel and convention center in Columbia Falls is steadily going up, and will feature 64 rooms. And the new SpringHill Suites Marriott in Kalispell expects to be completed and housing visitors by May.

Boyle said he’s confident the new properties will see full occupancy during the chaotic, frenetic summer months, though how they’ll fare the rest of the year is still up in the air.

“I feel confident about that six-week period in the summer months,” Boyle said. “The rest of the year, how is it going to play out outside of that six-week period, that’s the question.”

Diane Medler, director at the Kalispell Convention and Visitors Bureau, said she’s seen the seasonality of the valley’s economic performance start to diminish a bit, with the shoulder seasons taking on more of the burden and increasing hotel/motel occupancy.

Adding more rooms to the existing inventory will benefit travelers, Medler said, because there’s going to be more competition from the hotels to earn the travelers’ business. This means a likely increase in competitive pricing, she said.

As new hotels are added, occupancy numbers tend to shift, she said, and then they resettle in about a year or 18 months.

“Visitations keep increasing, so there’s definitely going to be reshuffling,” Medler said.

For example, the new hotel in Columbia Falls will likely attract people interested in visiting the park, Medler said, but if they’re visiting for more than a few days, they’ll likely explore other parts of the valley as well.

Lodging options run through private citizens, such as Airbnb and Vacation Rental By Owner (VRBO), are also increasing. According to HomeAway, the parent company for VRBO, Flathead County has seen a 10 percent increase in traveler demand for such accommodations when comparing 2014 to 2015, and a 23 percent increase in listing inventory.

Bigfork had the highest traveler demand for lodging, with a 45 percent increase in traveler demand and only 17 percent increase in inventory. Kalispell saw a 25 percent increase in traveler demand and 12 percent increase in inventory, while Whitefish increased its inventory by 25 percent, and traveler demand increased 10 percent. Inventory in Columbia Falls jumped by 49 percent in 2015, while demand increased by 17 percent, and Lakeside saw 12 percent traveler demand met with a 10 percent inventory increase.