State’s hospitality industry on the rebound
Yet hoteliers say they are determined to regain their early 2008 sales volume.
Â“The economyÂ’s very fragile,Â” concedes Bill McGarry, general manager of Holiday Inn Bridgeport. Â“You have a good month followed by a not-so-good month. We canÂ’t really seem to get any momentum.Â”
While the economic situation is improving in slowly, Â“We havenÂ’t gone back to pre-recession numbers,Â” McGarry acknowledges.
Christopher Barstein, general manager of WaterÂ’s Edge Resort & Spa in Westbrook, is beginning to see the tide turn, albeit slowly.
Â“We saw an uptick last year,Â” he says,. Â“In cheap valium it probably bottomed out. [Business] picked up in 2010 compared to 2009, and in 2011 it picked up over what we had in 2010.Â” Nevertheless, Barstein concedes, business activity remains Â“a far cry from what we were seeing in 2007Â” before the economic downturn.
Dinu Patel, owner and general manager of Rodeway Inn & Suites in Branford, agrees. Â“ItÂ’s better than before,Â” Patel says of current business activity compared with two or three years ago. How rapidly it improves depends on Â“multiple issues,Â” he says. Those issues include the cost of fuel and fallout from the recently raised hotel tax.
In PatelÂ’s opinion, Â“The tax is number oneÂ” among variables that impact the hotel business, he says. Under the administration of Gov. Dannel P. Malloy, the stateÂ’s lodging tax was raised to 15 percent, up from 12 percent, beginning July 1, 2011. The lodging tax applies to hotel room rental for less than 30 consecutive days.
In addition to tourists, some of PatelÂ’s business stems from the construction industry Â— companies that bring laborers to the state temporarily to work on building projects. Many of these workers come from states such as Oklahoma, Georgia and Louisiana, notes Patel.
The cost of lodging workers is among direct and ancillary costs of doing business in Connecticut that construction companies consider, Patel explains. And when a business decides to bypass Connecticut in favor of another state where costs, including the hotel tax, are not as high, Patel loses business.
Truck drivers, also, are Â“a good part of our business,Â” says Patel. But compared with states such as New Jersey and Massachusetts, Connecticut fuel costs, including the gasoline tax rate, are decidedly higher, he says.
Â“They [truck drivers] are not going to buy gas in Connecticut,Â” says Patel. He says truck drivers probably bypass Connecticut when they need to fill their tanks with diesel fuel. Those potential hotel customers, he adds, also are more likely to drive through the state than make a rest stop for an overnight stay.
Â“At the end of the day, what I can put in the bank, thatÂ’s what counts. And thatÂ’s what hurts,Â” says Patel.
On a typical day last month, the user-interactive gas-price reporting site GasBuddy.com showed prices in Connecticut ranging from a low of $3.68 in Stratford to a high of $4.31 in Stamford. (In Branford, where PatelÂ’s hotel is located, the price range was $3.83 to $3.99.) That compares with a statewide range of $3.42 to $4.15 in Massachusetts, and $3.23 to $4.07 in New Jersey, supporting PatelÂ’s assertion regarding vehicle fuel costs.
Like Patel, Barstein says heÂ’s Â“not at all happy withÂ” with the hotel occupancy tax and believes it could harm business. Neither, adds McGarry, did consolidating the stateÂ’s tourism districts into three regions help the hotel industry.
Â“It doesnÂ’t give us the ability to really market the region,Â” he says.
The state has opted to promote tourism with a broad, sweeping brush, establishing a potent brand by focusing and building on leads from potential tourists that would bring them to the state. This current, relatively lush tourism marketing landscape is completely different from the dry terrain of former governor M. Jodi RellÂ’s administration, when a mere $1 annually was allotted to market the state as a tourist attraction. Officially launched last month, the new Â“Connecticut: Still RevolutionaryÂ” tourism campaign aims to reel in revenue through popular destinations such as Mystic Aquarium and less familiar (to out-of-staters) resources such as the stateÂ’s beaches, museums and art galleries. Grants also are available to tourist attractions for various regional efforts. (See sidebar.)
Â“After having a dollar, this is certainly going to put a focus on Connecticut, put it back in the game,Â” says Ginny Kozlowski, executive director of the Connecticut Lodging Association.
The federal government also recognizes tourismÂ’s importance for the hotel industry and the economy overall, including its job-creation potential. The focus has now turned to proactively attracting and welcoming visitors, after a post-Sept. 11, 2001, period during which travelers were met with heightened scrutiny because of national-security concerns.
In January, in an effort to make the United States a global travel destination, President Barack Obama signed an executive order establishing the Task Force on Travel & Competitiveness. Co-chaired by U.S. Secretary of Commerce John Bryson and U.S. Secretary of the Interior Ken Salazar, the aim of the task force was to create a national travel and tourism strategy that will result in increased tourism in the United States among both domestic and international visitors.
On the international side, the long-term goal is to attract Â“100 million international visitors, who we estimate will spend $250 billion, annually by the end of 2021,Â” according to a recently released task force report.
The national tourism push was encouraged by the American Hotel & Lodging Association (AHLA), which in 2009 found fault with the economic stimulus bill Obama signed into law. AHLA said the visit us lacked initiatives to boost U.S. travel and tourism.
The U.S. lodging industry generates $134 billion annually, according to AHLA. The organization reports that in Connecticut in 2008 there were 366 lodging properties that generated $940 million in direct sales, 14,023 lodging jobs and $655.8 million in employee wages.
Â“I think the industry not just in Connecticut but across the country was impacted by the recession,Â” says Kozlowski, who also is president/CEO of the Greater New Haven Convention & Visitors Bureau. Â“IÂ’ve seen businesses close and move away, and contract on their business-side spending. ThatÂ’s been a concern.Â” Kozlowski adds that the hotel industry has also had to contend with the public-relations fallout from adverse publicity surrounding companies that received government bailouts but spent questionable amounts of money on travel and hotel expenses.
In addition, periods of harsh weather over the past couple of years have impacted the hotel industry, adds Kozlowski.
Â“We do not need another hurricane [such as Tropical Storm Irene that last August caused massive power outages]; we do not need another snow storm,Â” says Kozlowski.
What the lodging industry does need, and what the renewed emphasis on travel and tourism seems poised to exploit, is to let potential visitors know what Connecticut has in store for them. That includes, in addition to cultural and leisure attractions, comfortable, accommodating and affordable lodging, Kozlowski says.
Â“WeÂ’ve got some great bed-and-breakfasts, historic places, so we should take advantage of [promoting] them,Â” Kozlowski says, adding that being more proactive in attracting visitors is important. Â“Attitude definitely counts for a lot. You have to be customer-friendly and responsive.Â”
ItÂ’s a reminder that WaterÂ’s Edge Resort & SpaÂ’s Barstein, who oversees a facility already accommodating toward its clientele, believes is even more important now.
Â“WeÂ’ve rolled out almost everything,Â” says Barstein. Â“What weÂ’re trying is to show value proposition.Â” So every night something special is offered. On Sundays, for example, thereÂ’s a popular brunch and later that evening an endless dinner buffet is available for $21.95. On Fridays a traditional Italian dinner is offered.
Â“And weÂ’re always reworking our overnight packages,Â” offering different bundles that include meals and other amenities, says Barstein.
There also are special-occasion offerings. One of the newer ones is the hotelÂ’s Â“BabymoonÂ” package.
Â“ItÂ’s like a honeymoon, but itÂ’s for couples expecting a baby,Â” kind of a celebratory vacation together before a newbornÂ’s arrival, Barstein explains. He heard someone talking about it, did a little research, and decided to offer it to customers.
Â“So weÂ’re always trying to find out what our guests want,Â” he says, adding that hotels must pinpoint and promote their strengths in order to pull through the recession. Â“People are coming to enjoy the beach, the pool, the spaÂ” at WaterÂ’s Edge, Barstein notes. Â“For us, we are really a destination resort.Â”
Along with its new overnight packages, WaterÂ’s Edge recently unveiled a brand new outdoor pool and pool deck, demonstrating that even with the slowed economy the resort still emphasizes quality services.
Â“When you start shrinking to fit whatÂ’s going on, you start damaging the product,Â” Barstein says. Â“You have to push that top line with different packages. If you want to just roll up in a ball and wait for this to pass, you might not be there in the end.Â”
There are some adjustments that must be made, however, to stay afloat. For example, while still maintaining service quality, the Holiday Inn Bridgeport has shortened its restaurant hours. That saves on expenses, says General Manager McGarry. Nevertheless, he sees the economic state as a Â“glass-half-fullÂ” situation.
Â“IÂ’m very optimistic,Â” says McGarry, referring to ConnecticutÂ’s travel and tourism priority and how it affects the hotel industry. Â“If the Barnum Museum gets a grant, then that helps me because itÂ’s right nearby. IÂ’m hoping the new ads will have an immediate impact. So weÂ’ll take it from there.Â”
Â“Hopefully itÂ’s [the economic situation] going to turn around,Â” says Rodeway Inn & SuitesÂ’ Patel. Among his ways of addressing the economyÂ’s impact is paying more attention to social media Â— using it to promote his hotel to potential lodgers, and then seeing guests utilize it to write a review, which could attract more customers.
Â“So youÂ’ve got to keep up with that,Â” says Patel, adding that the reach of social media and other marketing tools have far-ranging possibilities. Â“This is not a local economy. ItÂ’s also a global economy.Â”
But in realizing new customer-base possibilities, the hotel industry should not forget elements that have traditionally attracted visitors. They should market themselves in accordance with those proven strengths, says Kozlowski.
In the New Haven area, for example, Â“to generate visitors from outside a 50-mile radius, Yale clearly is a top attraction,Â” she says. Also, Â“obviously thereÂ’s a great shoreline, and there are outdoor attractions, and the vineyards are really drawing lots of people.Â”
New local developments also should not be overlooked as industry boosters. In the New Haven region there soon will be a new School of Medicine at Quinnipiac University, and Yale is planning to build two new residential colleges. Additional colleges mean more alumni [for] reunions, and those alumni will need a place to stay when visiting their alma mater, notes Kozlowski.
Locally based foresight and creativity, along with regional collaboration, should help the lodging industry bounce back from the economic downturn, says Kozlowski, who attended a statewide conference on tourism in May. The eventÂ’s cheap valium emphasis included coordinated branding, establishing partnerships and cooperative advertising.
Â“I think itÂ’s very important that we all come together,Â” Kozlowski says. Â“The potential for growth in tourism is great. I think the [state marketing] campaign is going to take advantage of it.Â”