Hotel occupancy rates for the Hartford region declined 3.8 percent in 2008, as the faltering economy undercut fourth-quarter demand and contributed to the worst three-month occupancy rate dip in at least seven years.
Through July of last year, hotel rooms were filling up at the rate they did in 2007. But as the financial crisis took hold in the fall, Hartford-area hotel occupancy fell by 11.1 percent in October, 16.6 percent in November and 10.1 percent in December, according to a recent report.
“That was the trend nationally, too,” said Jeff Higley of Tennessee-based Smith Travel Research, authors of the report. “It was like everything stopped Sept. 1.”
For the year, the Hartford region’s occupancy rate fell to 56.4 percent, well below the national rate of 60.4 percent, STR reported.
Hotel and convention industry officials agreed that it remains a major challenge to retain old clients and head-hunt new ones.
“The mantra of the hotel industry is to maintain rates as much of possible,” Higley said. “To do that they (Connecticut lodgers) will have to provide value additions, such as free parking, Internet and breakfasts.”
A rising supply of Hartford-area hotel rooms also contributed to the recent drop in occupancy rates, as inventory rose 1.9 percent in 2008. But it was the slowest growth rate in four years.
Existing projects, including Hampton Inn & Suites planned for East Hartford and Farmington, are “remnants of development plans from the past 18 to 36 months,” Higley said. He expects hotel construction in the Hartford region and nationwide to slow dramatically if the gasping economy doesn’t begin to turn around.
Meanwhile, Hartford’s hotel room supply was reduced by 124 units in late December when the city’s landmark Goodwin Hotel, built in 1881, closed its doors. The owner blamed the shutdown on the hotel’s weak financial performance.
The region’s 2008 occupancy rate of 56.4 percent was the lowest in seven years, down from 58.4 last year and well below the region’s recent peak of 63.1 percent in 2004.
To address that decline, the Hartford Convention and Visitors Bureau and several area hotels have launched marketing campaigns.
Just ask Brien Fox, vice president of sales for the Waterford-based company whose Hartford-area properties include the 227-room Sheraton Bradley, the 409-room Hartford Marriot Downtown, the 393-room Hilton Hartford, and the 137-room Residence Inn by Marriot.
Fox said many companies have enacted travel freezes and cancelled meetings, while tourists and transient guests have cut back on discretionary spending. He said his hotels are trying hard not to make rate concessions but instead have added amenities such as spa packages and tickets to the Hartford Stage.
Eve Moore, who recently moved to Connecticut from California to become general manager at the 350-room Crowne Plaza, said she is hopeful occupancy rates will begin to swing up during the third-quarter of 2009.
“It’s an ebb and flow that the market sees over time,” Moore said. “This just forces us to work a little harder, a little smarter, and be creative.”
She said the Crowne benefits from recent renovations and a new restaurant specializing in California-style sushi and Asian fusion, overseen by a highly regarded new chef.
Moore said partnering with the convention and visitors bureau has been invaluable.
Scott Phelps, who heads the bureau, said that while Hartford area bookings are strong for conventions and large meetings “18 months and out,” groups have been increasingly reluctant to commit to Hartford.
Still, he’s upbeat about the Big East basketball tournament in March, a gathering of up to 10,000 Islamic people around Memorial Day and a convention for model railroad enthusiasts that is expected to draw 6,000 around Independence Day.