Report Predicts Modest Turnaround For Hartford Hotels
June 14, 2010
This year will be a better year for Hartford hotel occupancy than 2009, although a projected improvement off the worst year in recent memory doesn’t have hoteliers jumping for joy.
Occupancy in Hartford rose 5.3 percent for the first quarter of 2010, causing PKF Hospitality Research to forecast a similar increase for the rest of the year. The gains come as room rates have been cut and supply has increased, meaning the revenue per available room will decrease for the year, according to PKF’s Hotel Horizon’s report.
“It is nice to know that the bottom is behind us, but when people say a 5-percent increase, it is off a 20-percent decrease in 2009,” said Victor Antico, general manager of Holiday Inn Express Vernon. “Visitors are still dipping their toe back in the water, but nobody is jumping in.”
The 2.9-percent increase in hotel room supply brought the Greater Hartford area’s total room supply to 13,075. With more competition, individual hotels will see only modest gains in demand — about 2.4 percent — over last year, according to the report.
The Sheraton East Hartford hasn’t lost customers due to the 121-room Hampton Inn & Suites opening next door, said Dino Dimattia, Sheraton general manager. The Sheraton’s full service amenities find a different market than the Hampton’s limited service.
“We are seeing a little bit of an increase in occupancy and room rates,” Dimattia said. “Other hotels are offering greater deals to secure heads in beds.”
Overall, hotel room rates will be down 3 percent for 2010 compared to last year, according to the report. Because prices are dropping, the increase in demand won’t realize revenue increases for hotels until after the first quarter of 2011.
Modest increases still are better than decreases. Having a stronger market has enabled the Holiday Inn Express Vernon to begin incremental room rate increases this year to pay off a $500,000 renovation of the hotel. That couldn’t have happened last year, Antico said.
“We are pushing for rate integrity, but it is hurting us in some of our business,” Antico said. “It may be hurting us short term, but long term it is the right thing to do.”
The year is looking even rosier for the high-end hotels in Greater Hartford. A competitive study of seven hotel properties done for the Waterford Hotel Group — which includes the Hartford Marriott Downtown and the Hilton Hartford — shows an increase in occupancy of 11.7 percent.
Even though prices have been slashed by 8.7 percent, the increase in demand means revenue per available room is on the rise for the high-end market, according to that study by Smith Travel Research.
“The sentiment is the hotel market is returning a little,” said Robert Winchester, president and chief operating officer of the Waterford Hotel Group. “It is making something positive out of something being less negative.”