As sales vice president for hotel management company the Waterford Group, Brien Fox has not enjoyed this past winter’s weather.
“All the mid-week snow storms have really cut down on corporate travel and that impacts our bottom line,” he said. More white, it seems, has meant less green for Waterford’s downtown hotels — the Hilton, Marriott and Residence Inn — for the first three months of this year. But like warmer weather around the corner, Fox is forecasting a sunny 2014 for his hotels and Connecticut’s hospitality industry overall.
In fact, 2013 marked the fourth consecutive year the hotel industry in Hartford has seen positive trends in average daily room rates (ADR) and occupancy, which are key factors in driving a hotel’s profitability. That progress, industry experts say, is expected to continue.
According to figures from Boston-based PKF Consulting USA, which tracks hospitality industry trends, the ADR in Greater Hartford last year was $101.96, up 2.7 percent from a year earlier; average occupancy was 57.2 percent compared to 56.5 percent in 2012. While both figures lag slightly behind the 2013 national averages they compare favorably to Hartford’s 2009 Great Recession numbers: $95.24 ADR and 49.2 percent occupancy.
A big factor in the industry’s recovery has been an uptick in corporate travel, says PKF Consulting Vice President Andrea Foster. “As the economy continues to recover, corporations invest more in travel, there are more conferences,” she explained. “While occupancy has recovered in Hartford, I would expect the ‘new normal’ to be 59-60 percent [occupancy] averages in the city for the long-term.”
According to PKF’s 2013 Trends Report, which looked at 50 major U.S. markets, Hartford had the third highest jump in occupancy from 2012 to 2013, trailing only San Antonio and Tucson, Arizona.
This year, PKF predicts Hartford region hotels’ revenue per available room will jump 5.6 percent.
While Fox said he is still cautiously optimistic about the return of corporate travel, he is seeing strong demand for business lodging during mid-week. “At our downtown hotels, we are typically seeing occupancy between 88 percent and 98 percent from Monday through Wednesday,” he said, noting that his three downtown locations combined have nearly 1,000 rooms.
“But our challenge is how to drive guests during the weekends, when occupancy is typically between 40 – 45 percent,” Fox added.
It’s a challenge that Ginny Kozlowski, executive director of the Connecticut Lodging Association understands well. She works closely with a number of the 500 hotels across the state — with a collective 38,000 rooms — and the Connecticut Commission on Culture and Tourism to attract business and leisure travel.
Kozlowski noted that the shrinking state population — which means fewer in-state residents to support statewide lodging establishments — puts added pressure on attracting outside visitors to Connecticut. Overall, she contends, high-end bed and breakfasts and large, full-service hotels seem to have successfully weathered the Great Recession, but smaller limited-service mom and pop motels continue to struggle.
“Ultimately, it’s a very competitive market and you need a pipeline of events to attract people to Connecticut,” she said.
That’s a challenge that Michael Van Parys, president of the Connecticut Convention and Sports Bureau tackles every day. “We work closely with event and conference planners across the country to sell the state of Connecticut,” Van Parys said. “In Hartford, a 1,500 person conference would be the big game in town and that’s attractive [to conference planners].”
Despite the loss of the Women’s American Athletic Conference (formerly Big East) tournament in Hartford this year, which moved to Mohegan Sun Arena in Uncasville, Van Parys is still bullish on Hartford events. He noted, for instance, in January the Winterfest Volleyball Tournament at the Connecticut Convention Center attracted nearly 6,000 visitors to Hartford, which filled 26 area hotels.
So far this fiscal year Parys says 180 groups are looking to host events or conferences in Hartford. “That represents a total of 180,000 room nights statewide,” he said.
Meanwhile, besides short term-trends, Fox said he also has his eye on the longer-term demands and expectations of the next generation of travelers.
“We’re beginning to see the evolution of the hotel experience centered around mobile technology,” he said. “Issues like access to Wi-Fi for multiple devices and bandwidth will influence both how consumers interact with hotel staff and how hotels are designed.”
He says that the next generation of travelers — the millennials — are less interested in today’s concierge model. “They’re looking for technology to drive interaction,” he said, noting some hotels in the U.S. already offer keyless check-in using mobile phones.
“If a hotel doesn’t adapt to the technology wave, it’ll be a difficult road ahead,” Fox said.
