While King County hotels are selling roughly 65% of their rooms this year at an average daily rate of $167, both figures are down slightly year-over-year.

SEATTLE — As hotels across King County face persistent economic headwinds — rising costs, slow growth in occupancy, and interest rates eating into profits — local tourism officials are concerned that forecast declines in international travel to the U.S. will only exacerbate those problems.

Mark Everton, CEO of the Seattle Southside Regional Tourism Authority, said during remarks Friday that while King County hotels are selling roughly 65% of their rooms this year at an average daily rate of $167, both figures are down slightly year-over-year.

“Our hotels are struggling and will continue to struggle for some time,” Everton said.

King County accounts for about 41% of Washington’s hotel inventory, with 43,000 rooms available daily. By comparison, statewide hotel occupancy is averaging 60%, down by 1.5% from last year, with a lower average rate of $142.

Everton highlighted the SeaTac, Tukwila and Des Moines area, which his organization represents. That area makes up about 21% of the county’s hotel inventory, while downtown Seattle represents 40%.

Between 2019 and 2024, average daily rates rose 12–13% across the region, translating to just 2% annual growth. Occupancy in SeaTac and downtown Seattle areas still has not returned to pre-pandemic levels, even as countywide occupancy has gained 5%.

While total hotel revenue in King County has risen about 18% since 2019, downtown Seattle barely outpaced 1% growth over the same period.

Meanwhile, hotel operating costs have risen. Washington’s minimum wage increased nearly 40% since 2019, health insurance premiums rose 42%, and some liability insurance costs more than doubled. Interest rates for commercial mortgage-backed securities — a common hotel financing tool — are also up 92%.

“In the case of some of the San Francisco Bay area’s largest hotels, they’ve either closed or handed their keys back to their lenders simply because they can’t afford to refinance,” Everton said. “King County hotels may be facing some similar situation in the near future.”

Everton also pointed to concerning trends in international travel. While Seattle-Tacoma International Airport has added new routes, inbound traffic from Canada and Mexico is expected to decline. Oxford Economics is forecasting a drop in international visitors to the U.S. this year.

In more rural parts of Washington, such as Whatcom County, hotel occupancy is already falling — likely due to a slowdown in Canadian visitors, Everton said.

“Our hotels in the SEA area and Seattle have actually experienced negative growth in occupancy — inbound international travel is of a concern,” Everton said.

Despite the challenges, demand for travel remains strong. A recent survey from U.S. Travel showed 92% of Americans plan to take a trip in the next six months. But 70% said they are choosing more affordable options — a trend that could prevent hotels from raising rates in the near future.

“We need to get more travelers, more visitors, more tourists, more business travel, more corporations coming, more conventions,” Everton said.

In response to shifting travel trends, the tourism authority has reallocated its marketing budget away from Canada, citing declining interest among Canadian travelers. Instead, efforts have been redirected to major domestic feeder markets, including the Bay Area, Los Angeles, Dallas, Phoenix, Chicago, New York and Boston.

“We’ve moved most of our marketing away from Canada because of the kind of negativity we were receiving from Canadian travelers, at least for now,” Everton said. “Instead, we’ve reallocated those dollars to our feeder markets.”