2010 may be a turnaround year for Hartford area hotels after all: More guests are staying at the area’s hotels and paying slightly more for the privilege, a lodging analyst says.
Collier PKF Hospitality Research in Boston has reversed its prediction from earlier this year, now saying Hartford hotels will earn more revenue this year due to the booking trend.
“Occupancy is driven by the corporate traveler,” said Cathy Kilian, PKF New England hospitality sector director. “As the economy starts to come back, hotels will see an increase in the number of corporate travelers.”
In its September report, PKF projects occupancy at Hartford hotels to rise 5.2 percent in 2010. The analyst made the same occupancy prediction in its June report yet at the time it was forecasting a 2010 revenue decrease.
The difference in the two forecasts, PKF says, is that occupants will be paying more for their rooms. The average room night will cost $94.60 in 2010.
Although room rates are still down from 2009, the rates aren’t expected to drop as much as PKF previously predicted. In June, the analyst said room rates would be down 3 percent for the year; now the decrease is expected to be much lower at 1.1 percent.
Coupled with the increase in occupancy and the new room rate prediction, PKF predicts revenue per available room will rise 4.0 percent compared to 2009. This marks the first increase in revenue per available room since 2007. PKF previously said Hartford hotels would have to wait until 2011 to see a turnaround.
Despite the increase for the first time since 2007, hotel revenues haven’t recovered to pre-recession levels, yet. There has been a 17.3 percent cumulative decline in revenue over the past two years, so this year’s 4.0 percent increase doesn’t offset those losses.
Next year appears to be an improvement over 2010, according to PKF’s early prediction. Average room rates will rise to $98.86 and occupancy will increase 1.5 percent. Those increases mean revenue per available room should increase 6.1 percent over 2010.
“Next year will still be a slow growth year, much like this year,” Kilian said.
Diluting the industry increase in revenue per available room are new hotels creating more supply in the Hartford area.
The 121-room Hampton Inn & Suites opened in East Hartford earlier this year. Coming online later this year and early next year are the 100-room Holiday Inn Express in Newington; the 110-room Cambria Suites in Windsor Lock; Â and the 122-room Courtyard by Marriott in Southington.
