Hartford’s hard-hit hotels are struggling to stay open after pandemic squashes business travel and convention business

In the months before COVID-19, Hartford started focusing in on plans to bring new hotels into the city as it sought to better compete for convention business.

Now, a year and a half into the pandemic, with few conventions and even less business travel, the city is hoping to just hold onto the guest rooms it already has.

“Hotels around the country have been hit hard by the pandemic, but the hotels that have been hit the hardest are the ones that rely to a large extent on business travel, on conventions and large-scale sporting and entertainment events, which is true of Hartford’s hotels,” Hartford Mayor Luke Bronin said. “Our hotels have been hit especially hard.”

A shake-up in the city’s hospitality industry has been shaping up for months. Most recently, the owner of one of downtown’s largest hotels, the 392-room Hilton Hartford on Trumbull Street next to the XL Center, is exploring other options, including converting part of the aging hotel into housing, after an unsuccessful effort to sell last year.

Hotels in cities like Hartford — especially large ones like Hilton and the 409-room Marriott Hartford Downtown near the city’s $267 million, state taxpayer-backed convention center — are a critical cog in the economic development ecosystem of both the city and the surrounding region. They bring in visitors whose spending ripples through restaurant, shops and other businesses.

The hotels also give the city an added edge in attracting conventions and high-profile tournaments such as the first round of the NCAA men’s basketball tournament in 2019, when guest rooms are nearby and convenient.

But hotels — especially larger ones — depend on group bookings from conventions and large-scale events, which industry experts say may not recover until late 2023, at the earliest. Business travel, another mainstay, may never get back to where it was in 2019, as technology has drastically cut back the need to meet face-to-face.

Hospitality troubles

The woes at the Hilton follow on the closure last year of the Homewood Suites on Asylum Street and conversion to the Bond Residences. The new owners of the former Red Lion Hotel on Morgan Street near Dunkin’ Donuts Park plan to convert the entire building into rentals, the apartments on the already converted upper floors now 70% leased.

Hospitality troubles are not limited to Hartford. The Red Lion Hotel in Cromwell closed just before the onset of the pandemic, and it’s not clear if it will reopen. The Hartford Marriott Farmington closed in May, was sold and plans are for converting it to apartments.

It is not a stretch that a portion of the Hilton might be converted to housing because across the country apartment development is one of the strongest commercial real estate sectors, alongside warehouse development. Since 2013, apartment development has been a major force in revitalizing Hartford, especially in the downtown area, and is likely to lead the way out of the pandemic.

Len Wolman, chairman and chief executive of The Waterford Group, which owns and manages the Hilton and Marriott in downtown Hartford, said the pandemic created conditions Wolman has not seen in 40 years in the business.

“There’s never been a time like this when we’ve had no control, and we’ve had to take it day-by-day,” Wolman said. “It’s been tough sledding. But even in the depths of it, we’ve kept these properties open and kept them operating.”

An unpredictable future

Wolman and others said the onset of widespread coronavirus vaccinations this spring brought a new level of comfort to the public, giving an encouraging boost to leisure travel this summer. Coupled with that, major employers were looking to a return to the office in the fall by employees working at home.

But a more upbeat outlook was relatively short-lived, they said. The aggressive COVID-19 delta variant and increasing reports of breakthrough infections by those who had been vaccinated reined in travel and corporate plans for return to the workplace.

“The challenge for what we are seeing now is there’s not a predictability that there was a year ago as we were seeing the vaccines developed,” Ginny Kozlowski, executive director of the Connecticut Lodging Association, said. “We saw a pathway then, and now, it’s not so clear what that pathway is.”

The hole to climb out of is deep. Occupancy in downtown Hartford hotels for the first seven months of this year was 30.1%, compared with the 68.4% for the same period in 2019, according to STR, the global hospitality data and analytics company. The analysis is based on the 06103 ZIP code that takes in much of downtown.

The picture, however, is brighter for the city as a whole. STR reports that for the first seven months of this year, occupancy is 50.3% compared with 62.1% for the same time frame in 2019.

State economic development officials say they are keeping an eye on the hospitality industry’s recovery in Hartford and throughout the rest of the state. The state budget for the fiscal year 2022 included $30 million in federal Rescue Plan Act funding for the industry.

“DECD is currently monitoring the hospitality industry’s recovery from the COVID-19 pandemic over the summer and fall of 2021, and will be designing a program to respond to the needs of this industry in early 2022,” DECD spokesman James Watson said, in an email.

A bigger role for smaller hotels

Smaller hotels — even the 124-room, Goodwin Hotel, a boutique hotel in the heart of downtown Hartford — appear to be faring better this summer than their larger counterparts. That’s largely because they do not depend heavily on booking large convention groups, though they do often get “spillover” bookings as a result of those events.

Randy Salvatore, founder and chief executive of Stamford-based RMS Cos., which partnered in the renovation and reopening of The Goodwin in 2017, said in the aftermath of the pandemic smaller boutique hotels may have a larger role to play, especially if business travel does not return to levels of 2019.

So, even if some rooms were lost at the Hilton, there would be the need for fewer hotel rooms in the years ahead, said Salvatore, who also is developing around Dunkin’ Donuts Park.

“That’s probably the reality, not only in Hartford, but in markets across the country,” Salvatore said.

While it is largely speculation how the convention business will eventually shake out, the events could be smaller, with some participants attending virtually. Still, the need for networking and the social side of conventions isn’t likely to go way.

And this past weekend, the annual ConnectiCon convention drew 24,000 to the city’s convention center.

There also could be new convention themes, like team building, that bring together workers who do their jobs remotely and never see each other, except on a screen.

Fred Carstensen, director of the Connecticut Center for Economic Analysis at UConn, said he sees a fundamental shift in the hotel industry, from large hotels to boutiques, like The Goodwin, and a heavier emphasis on leisure travel.

“There will be an effort to move in that direction,” Carstensen said. “Small boutiques that offer a lot of amenities. But I think we’re going to see a lot of experimentation of trying to find ways of attracting a new clientele.”

Larger hotels still critical

Prior to the pandemic, the hotels that were being considered in Hartford — on Lewis Street, in a portion of 55 Elm St. along with apartments and on the vacant lot at the southeastern corner of Constitution Plaza — were all boutiques.

“The boutique hotels are a different breed, but they are having more success than the corporate hotels,” Michael W. Freimuth, executive director of the Capital Region Development Authority, said.

Freimuth said the problem is figuring out how they might fit into primary bookings for conventions and other large events. Generally, when conventioneers book, they are looking for hotels with a brand name, so they know what they can expect in their lodgings, Freimuth said.

Both Bronin, the Hartford mayor, and Freimuth say they expect large hotels like the Marriott and the Hilton to play key roles in the future, even if there are changes at the Hilton.

“Looking long term, I do believe that you are going to see a resurgence of convention activity, business travel as well as increasing event-related business,” Bronin said. “We need to do our best to sustain what we have and keep our eye on the ball long term to ensure there is enough hotel capacity.”

Contact Kenneth R. Gosselin at kgosselin@courant.com.