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City Hotels Are Loss Leaders

Convention business is rising star, but hotel bookings crater

By SEAN O'LEARY, Hartford Business Journal Staff Writer

July 16, 2007

Convention and tourist business is booming in Greater Hartford. But the city of Hartford is doing worse than ever in capturing those tourist dollars.

For the fiscal year that closed June 30, the Hartford region saw 168 events, a 10 percent increase from the prior year. Those events attracted 213,073 attendees, a 28 percent increase. And the number of hotel room stays jumped 55 percent to 131,130, said the Greater Hartford Convention and Visitors Bureau.

Yet while hotel occupancy rates skyrocketed in the region, they plummeted in the city.

Occupancy rates for Hartford hotels fell from 60.1 percent from the first four months of 2006 to 56.3 percent for the same time frame this year, according to the STAR Report, compiled by Smith Travel Research.

Falling Star

“That’s a massive decline compared to New England, compared to the entire country,” said Simon Flynn, executive director for the Connecticut Lodging Association.

National hotel occupancy rates are at 64 percent, down 0.7 percent from 2006. The rates for New England dropped from 57.4 percent for the year-to-date in April 2006 to 57.3 percent this year, while rates for Connecticut increased from 58.7 percent to 59.5 percent.

Flynn said “another sad story” when it comes to the state of Hartford’s hotels is lost revenue opportunity. The city’s hotels booked about 2.2 percent more revenue for the four month period. But the national average was 4 percent.

The price of rooms at Hartford hotels went up by the lowest percentage in the country, which makes the decrease in occupancy even more damaging, Flynn asserted.

Hotels Agree

Local hotel operators know they have to find new ways to lock in bookings. But they argue for patience.

“We’re still seeing the ramping up of business in the city,” said Terry Bickhardt, president and COO for the Waterford Group. “It’s important that our primary focus for both leisure and corporate business is to get that business downtown and that downtown becomes the focal point for lodging.”

The Waterford Group operates 18 hotels in Connecticut, including the Hilton, Marriott and Residence Inn in Hartford and Bickhardt said that an increase in weekend occupancy has been noticeable.

“There’s progress and there have been a lot more activities on the weekends,” said Bickhardt. “It’s still important for all these organizations to work together and coordinate their efforts to bring more people in.”

H. Scott Phelps, president of the Greater Hartford Convention and Visitors Bureau, said one issue hurting the city is the lack of hotels with more than 500 rooms, or hotels that can provide more space that can be used as auxiliary locations for conventions to host luncheons or speakers.

“If you try to use a hotel for a convention or a meeting, you have to break down the trade show to set up the food,” said Phelps. “The groups that are coming for these bigger conventions want 500-plus rooms in one location and we’re not able to accommodate them right now. Hopefully that will change.”

Phelps cited the success of the United Church of Christ’s 50th anniversary convention that last month brought 10,000 people downtown for several days, a crowd that swelled to more than 12,000 for the speech of presidential candidate Sen. Barak Obama, D-Ill.

But accommodating all those visitors meant scattering them over 40 hotels throughout greater Hartford, Phelps noted.

According to the bureau, another estimated 12,000 or so people will be visiting Hartford as part of four conventions in July, including approximately 10,000 for a joint convention of the Islamic Circle of North American and the Muslim American Society.

“If you look at where we’ve come in the past few years, it’s dramatic,” said Phelps. “We’re making it easier for them to get here and Hartford is an affordable destination compared to Boston, New York and even Providence. It is certainly helping our national reputation.”

More Needed

But the lodging association’s Flynn said much of that is simply wishful thinking at this point. And he asserts it’s a problem that lies more with lawmakers than with innkeepers. He charged that the state government has failed to market Connecticut properly by slashing the tourism budget for years.

“Hartford needs marketing and Connecticut needs marketing,” said Flynn. “Connecticut is at the mercy of the legislature. We’re losing compared to everyone else out there because other states are telling their story. Connecticut does not tell its story to tourists.”