Hotels climbing back from recession

Even with the snow, ice and freezing temperatures, more overnight visitors arrived in Providence this winter than last.
From November to December, hotels reported an average of half their rooms filled, according to data collected by Smith Travel Research. A year ago, the occupancy rate during that timeframe stood at 46 percent.
Those in the hotel industry say occupancy rose thanks to a combination of an uptick in attendance at events, along with a gradual willingness by consumers to crack open their wallets a little more.
“We’re slowly inching up to pre-recession demand. We’re not quite there yet,” said Neil Schriever, senior vice president at the Providence Warwick Convention and Visitors Bureau.
The recession that struck in late 2008 led to a precipitous drop in hotel bookings as leisure travelers clutched their wallets and corporate America set out to trim expenses, including costs associated with travel and conventions.
In 2009, the Providence market struggled to regain its footing, with improvements not coming until early 2010. Hotels received an extra boost in March 2010 when the NCAA held the opening rounds of its basketball tournament at the Dunkin Donuts Center. In April 2010, hotels saw another unusual influx of guests after massive flooding led federal emergency officials to descend on the city.
With no basketball tournament last month – and hopes for no more flooding – Schriever said March and April occupancy rates may not show improvement compared with a year ago.
However, Schriever and others say the market appears to be gaining strength.
“I would say overall that there’s good reason to be optimistic based upon the last six to 12 months simply because the regional economy is doing well,” said Richard Brush, dean of the Hospitality College at Johnson & Wales University in Providence. “We just always have historically received some benefit associated with the other two markets, New York and Boston, around us.” Providence, Brush said, especially stands to gain as companies show more willingness to send their employees to regional-association meetings, which hopscotch around New England but often find a home in Providence. Those associations can attract hundreds or thousands of people that fill hotel rooms and restaurants.
At the R.I. Convention Center – the city’s largest event venue – attendance at the five major trade shows this winter was up, said Kim Keough, a spokeswoman for the R.I. Convention Center Authority.
And at the visitors bureau, Schriever said staff are seeing some smaller events book for the first time after hiatuses linked to the poor economy.
At the Christopher Dodge House across from the Statehouse, co-owner Monica Hopton sees hope for the first time in months. Bookings across all types of travelers are up at the bed-and-breakfast owned by her family.
“It’s getting a little better but it has to be great for about a year for us to get back on track,” said Hopton, whose family has struggled to hold onto the hotel during the turbulent economy.
To keep the inn afloat, the family has put its own money into the business and sought to highlight specials and all-inclusive packages to entice guests.
Like many local hotels, the inn has also held the line on rates.
Smith Travel says that room rates across Providence are ticking up. The average daily rate was $1,119 between November and February, up just $3 from the same period a year ago.
Schriever said hoteliers expected a slow climb given the reality of cost-conscious travelers facing tight budget situations at home and corporate executives on a mission to slash travel budgets.
In many cases, hotels may also be sleeping in the beds they made more than a year ago. Back then, with the economy showing no signs of recovery, hotels likely negotiated steep discounts with organizations planning future events, said Brush, the former general manager at The Providence Biltmore. “Hotels were doing anything they could to get business in and that meant discounting,” Brush said. “The rates you’re seeing today are somewhat reflective of the negotiated rates that occurred one to two years ago.”
Still, overall room revenue at Providence hotels inched up this past winter, according to Smith Travel Research. Between November and February, Providence hotels reported $16.9 million in room revenue compared to $15.1 million the same period a year ago.
Nonetheless, hotels, sensitive to the struggling economy, are still scurrying to shave costs. Brush said Providence hotels are following a national trend to outsource hotel services ranging from housekeeping to valet services. Others are choosing to stop managing their own restaurants in favor of leasing the space to an eatery that can provide a guaranteed monthly lease payment. The Westin Providence made headlines after its owners decided to slash wages and outsource some functions in a move that brought noisy picket lines. The employee union finally reached a contract with the hotel’s parent, The Procaccianti Group, in February.
Hopton and her family made the decision last March to sell a sister bed-and-breakfast in Providence after occupancy tumbled and expenses and taxes rose. And now at the Dodge house, she is more willing to cut deals than ever.
“We’re definitely more open to discussing things,” she said. “We’re doing the Mexican barter thing.”
Still, for all their drawbacks, low room rates may come with one silver lining, said Kristen Adamo, vice president of marketing and communications at the visitors bureau.
With relatively low rates, the city becomes especially appealing to group-tour companies as well as religious and sports groups, she said. &#8226