Despite All-Star summer, recovery is elusive for Seattle’s tourism industry

For many shop owners, hoteliers and other travel-dependent businesses in and around Seattle, the fourth anniversary of COVID-19 shutdowns, back in March 2020, has brought a now-familiar mix of hope and uncertainty. 

On the upside, cruise season opens next week, which means throngs of free-spending tourists in Pike Place Market and downtown Seattle. Businesses can also count on crowds of Mariners and Sounders fans, well-heeled attendees at the new convention center and armies of fans in town for the Rolling Stones, Kenny Chesney, Metallica and other big names. 

But there is anxiety, too. Even as parts of the city’s travel economy have rebounded, others are seriously lagging, despite a recent lineup of big sporting events and superstars like Taylor Swift. Hotel occupancy and visitor numbers in downtown Seattle are still below pre-pandemic levels, according to Visit Seattle, a trade group.

In Pike Place Market, foot traffic over the last year has been running at around 80% of 2019 levels, according to the Downtown Seattle Association.

“It’s been a learning process since then,” said Loren Trayes, who has sold her screen-printed LT Designs clothing at Pike Place Market for 20 years, and is still not quite back to her sales numbers in 2019. 

Trayes could be speaking for much of the downtown Seattle visitor-driven economy. 

While parts of the industry, such as conventions and Alaska cruises, have bounced back, others including corporate travel and international travel are lagging — and nearly all operators are struggling with inflation and higher interest rates, which weren’t a problem before COVID. 

This year should bring major improvement in overall visitor numbers, said Tammy Canavan, president and CEO of Visit Seattle. But Canavan also notes that some forecasters think it may be 2025 or 2026 before Seattle’s tourism business “resembles normal again.”

Good bumps

That unevenness of the recovery was on dramatic display in 2023. Entertainment-driven tourism in and around Seattle was booming, with free-spending crowds in and around Seattle for the baseball All-Star Game in July and noticeable bumps in sales before and after several big-name concerts.

“Tons, tons of people came down” for the two sold-out Taylor Swift shows in July, said Isaac Behar, co-owner of Pure Food Fish Market, in the Pike Place Market.

George Strait’s June 17 show at Lumen Field, meanwhile, meant “record sales” at Seattle Shirt Company’s downtown location, said manager Melissa Carlson.

Even shows like Dead and Friends in the Gorge Amphitheatre meant business bumps in Seattle. “They stock up on smoked salmon and all sorts of food and produce to [take] to the Gorge,” Behar said.

Likewise with Seattle’s cruise industry, which saw a record year in 2023, with 291 sailings and 1.8 million “revenue” passengers during the six-month season, according to the Port of Seattle.

Or consider the business meeting business. At the Seattle Convention Center alone, 2024 will bring at least 55 meetings and conventions and 259,000 attendees, a 30% jump over 2019, according to Visit Seattle.

Those passengers and attendees in turn have become hugely important for hotels, restaurants and other service industries in and around the Seattle-area.

They’re also a big part of the reason Seattle has thus far managed to buck the decline in leisure travel that has hit some cities,said Eileen Bosworth, with the Portland office of HVS, a global consulting and appraisal firm focused on hotels.

Compared to “other cities along the West Coast that are continuing to struggle right now,” Bosworth said, “Seattle just continues to do very well on the leisure side.”

Mixed signals

But there were plenty of warning signs, too. This year will see a slight dip in cruise business compared to 2023, with 277 sailings and an estimated 1.7 million passengers, according to the port.

Hotel bookings are still lagging pre-pandemic levels. In 2023, downtown Seattle hotels averaged 69% occupancy, compared to 80% in 2019, according to Visit Seattle.

Some of that reflects an increase in supply in the number of hotel rooms, which has risen by at least 1,300, to around 16,000 hotel rooms, since 2019, according to Visit Seattle. But a bigger factor is likely the decline in corporate travel, which hasn’t rebounded from the pandemic as companies rethink their pre-COVID views on the necessity of meeting in person.

Conventions have been a bright spot, but even here, businesses are showing new caution. Where companies, trade groups and other convention center customers used to book convention dates six or more years into the future, they’re now more likely to book two to three years out, according to Visit Seattle.

In conventions as in much else, “we didn’t go back to the way it used to be,” Canavan said. “Everything’s quite different now.”

Many travel-related business have compensated for lost visitors by raising prices. Among downtown Seattle hotels, for example, the average room rate in 2023 was $234 versus $213 in 2019, according to Visit Seattle.

But like nearly all other businesses, most travel-related businesses have seen those increases in revenue largely eaten up by rising costs.

Labor costs in particular have soared, both because of Seattle’s minimum wage law, currently at $19.97 an hour, but also because of the Seattle area’s tight labor market and skyrocketing cost of living.

Craig Schafer, owner of two downtown Seattle Hotels — Inn at the Market and Hotel Andra — figures his labor costs alone have gone up 50% since 2017 and “almost [by] double digits per year over the last three or four years.”

Many tourist-related businesses in downtown Seattle have also seen security and insurance costs skyrocket since the start of the pandemic. “We have security fulltime now,” said Carlson at Seattle Shirt Company. “We didn’t have to have that before.”

And as with every industry, there are limits to how far hospitality businesses can raise their prices.

Where many consumers were initially understanding of inflation-related price hikes, hotels, restaurants and other businesses “are starting to get pushback from customers,” said Anthony Anton, president and CEO of the Washington Hospitality Association.

Staying flexible

For many industry insiders and observers, the challenge of the next few years will be finding ways to hold on while the travel slowly finds its new equilibrium.

Schafer, for example, has already seen a slight increase in business travel during the first few months of 2024, and expects it to ultimately rebound more than some forecasts suggest.

Other industry insiders think the lineup of entertainment and sporting events over the next several years, including the FIFA World Cup in 2026, will be a huge boost for the international travel segment, which has been so slow to recover.

But if anything, for many travel-dependent businesses in and around Seattle, the past four years have been a lesson in not counting on a steady recovery.

Trayes, the Pike Place Market clothing vendor, said though she’s “cautiously optimistic,” for the coming season, she and others who have survived so far had “to figure out how to be adaptable.”

“We’ve all learned that kind of the hard way recently.”