Providence hotels find fewer guests

THOMAS RIEL, left, director of sales and marketing for the Providence Renaissance Hotel, and Angelo DePeri, the hotel's general manager, show a visitor one of the rooms. /
THOMAS RIEL, left, director of sales and marketing for the Providence Renaissance Hotel, and Angelo DePeri, the hotel's general manager, show a visitor one of the rooms. /

Occupancy in Providence hotels declined to its lowest level in more than a decade in 2006, the third year in a row that hotel occupancy dropped in the Capital City.
Average occupancy in Providence hotels last year was 63.7 percent, down from 67.2 percent in 2005 and 72.9 percent in 2004, according to Pinnacle Advisory Group, a hospitality consulting firm based in Boston.
The lodging statistics, delivered May 10 at an economic outlook meeting of more than 50 representatives of the state’s hospitality and tourism industry, was significant especially because the supply of hotel rooms in Providence will increase sharply in coming months and years, possibly driving average occupancy down even further, said Rachel Roginsky, president of Pinnacle.
Hospitality leaders hope the presence of more hotel rooms in Providence will enable the city to attract more tourists and larger conventions. But Roginsky’s message was that, while good things may be on the horizon for the hotel industry, the short-term future could be rocky.
“It’s not going to be a very cheerful day today, unfortunately,” she said. “The problem we see going forward is that we have new hotels coming onboard with declining demand.”
To a great extent, the situation in Providence’s hotel market is a local reflection of a national trend. Hotel occupancy nationwide has dropped significantly since 2001, as a result of 9/11 and the economic recession that followed.
But Providence’s hotel occupancy numbers have continued to decline as the nation’s average has rebounded in recent years. The national hotel occupancy average was 63.3 percent last year, up slightly every year from a low of 59 percent in 2002.
Rhode Island is still the hotel occupancy leader in the New England region, at 62.8 percent last year. Massachusetts, following closely with a 62.2 percent occupancy rate, has closed the gap in recent years.
And as in Providence, the number of hotel rooms across the nation will sharply increase in coming months and years. Construction of new hotels and lodgings was up 56 percent nationwide in November 2006 versus a year earlier. Including lodgings that are in the planning stage, the number of hotel rooms in the U.S. is expected to increase 78 percent, Roginsky said.
Like their counterparts nationwide, hoteliers in Providence have maintained earnings by raising room rates. The average daily room rate in Providence was $151.65 last year, up almost $9 from 2005. It was the fourth year in a row that room rates increased in the city.
The average room rate in Rhode Island was $120.17, and the national average room rate was $97.19 in 2006.
Martha J. Sheridan, president and CEO of the Providence Warwick Convention and Visitors Bureau, suggested that Providence’s hotel occupancy numbers for 2006 were misleading, because the former Holiday Inn on Atwells Avenue underwent renovation for the better part of last year before reopening as Hilton Providence.
At the same time, an increased number of new hotel rooms in Warwick may have lowered Providence’s numbers, Sheridan said.
But Roginsky said Providence’s drop in hotel occupancy last year was strongly linked to flat business at the R.I. Convention Center in recent years. The number of room nights associated with attendance at the convention center was 62,421 last year, up from 61,931 in 2005 but less than historical averages.
“You’ve got to get room nights from the convention center up as much as possible,” she said. “That’s where there’s been a slip-off in the occupancies in the city.”
The convention center has struggled to increase the number of events it hosts and attract larger conventions in large part because of increased competition from new convention centers in Boston and Hartford, as well as competition from 2nd tier cities throughout the nation, including Albuquerque, N.M., Louisville, Ky., Pittsburgh and Portland, Ore., said Neil Schriever, vice president of sales for the PW CVB., and other tourism officials.
“It’s real warfare out there,” said Evan Smith, president of the Newport County Convention and Visitors Bureau, discussing the convention industry. “A lot of American destinations are pulling out all the stops.”
The number of events already booked at the convention center this year and in the next few years is on an upswing, in part because there will soon be enough hotel rooms in the city to accommodate very large conventions, Schriever said.
Four hundred seventy-four new hotel rooms are scheduled to be added in Providence this summer – 274 at The Renaissance Providence Hotel, which is expected to open any day at the site of the old Masonic Temple, and another 200 scheduled to come online in August when the Westin Providence Hotel opens a new addition.
Another 161 rooms are scheduled to be added in early 2009 when the Hotel Sierra opens, and at least six other hotel projects are being planned or considered, Roginsky said.

No posts to display