During the first half of the year, the occupancy rate at a key sample of Spokane and Eastern Washington hotels climbed to 64.3% from 62.2% percent in the year-earlier period. In the first half of 1988, occupancy rates were as low as 56.8%, says Wolfgang Rood Hospitality Consulting, of Bellevue, Wash., which surveys the Northwest hotel industry regularly.

The boost in demand increased the average daily room rate as well by 2.6% to $65.33, while statewide room rates fell slightly. Another indicator of lodging-industry growth here are revenues derived from a 2 percent tax by the city and the county on room charges at establishments with more than 40 rooms. Both the city and county reported double-digit growth in room-tax revenues in the first quarter of this year.

Ron Anderson, Spokane-based regional manager for WestCoast Hotels Inc., says a boom in lodging construction here several years ago—especially the building of inexpensive, limited-service hotels—glutted the market with hotel rooms. Since 1998, hotel construction has slowed, and demand for rooms now is starting to catch up with supply, he says.