Clips/ Feature Article

Hotel Industry Booming in W. Massachusetts
By Richard Trombly | BusinessWest: February 2000

EXCERPT

The steady improvements in the economy through the mid-1990's led to a booming market for the hotel industry in the Pioneer Valley. Many of the area hotels took advantage of this economic climate by reinvesting millions of dollars to refurbish and renovate their properties.

In 1996, despite luring conventions and increased business and leisure travel in the area, the occupancy rates for the Springfield area were only about 70 percent. With surplus rooms, no guarantee that the economy would remain strong, and awaiting the fate of a bid for a local casino and Springfield waterfront development, there was no new construction slated for the area.

The hospitality industry has benefited from the strong economy to return record years according to Tennessee-based Smith Travel Research. 1998 showed an increase in profits of 23 percent and surpassed 1997 as the most profitable year in the lodging industry. Gross profit rose to $20.9 billion in 1998 which is nearly double the amount earned in 1996. The data for 1999 will not be available until mid-2000 but the projections are for continued growth through 2000.

"We have seen little or no growth in the number of rooms in the Valley since the late '80's when the last new hotel, the Hampton Inn, was built," said Steven Root, executive director of the Greater Springfield Convention and Visitors Bureau, "Due to the strong economy and the draw of the region, occupancy rates have steadily increased to over 80 percent in the Springfield area. We are seeing many hotels adding rooms and facilities."

In response to this growth, the Springfield Sheraton is in the process of adding 21 new rooms. The project's first phase, six extended stay business suites opened on Feb. 21st 2000.

"These hotel rooms are equipped with kitchenette as well as computer and office facilities," said Paul Picknelly, president of Springfield Sheraton and Monarch Place," They are designed for the business traveler staying for two to three weeks."

Picknelly said that the second phase of construction will begin in March and provide another 15 guest rooms and suites.

"One will be a presidential suite," said Picknelly, "It will be two and a half times the size of a normal guest room with a marble bathroom and a Jacuzzi."

The space for this project came from three meeting rooms on the fourth floor and utilizing 6,000 square feet of former office space in Monarch place as meeting rooms.

Springfield Sheraton director of sales, Kathy DeLand said, "We are taking the existing space and using it better. That is how we have added a junior ballroom and full service business center. I call it finding the hidden gems."

The need for the new rooms was clear. Picknelly said that there were almost 150 nights that the Sheraton had full occupancy and an overall occupancy rate of 82.5 percent in 1999. Picknelly attributes much of his business to the convention and conference market.

"We have had the luck of cooperating with the other downtown hotels to draw conventions and conferences," said Picknelly, "and they like it here. Springfield has an ideal location for conventions of under 500 people. The conference space and the attractions of the surrounding area are a real draw. We can provide the same services as Boston for nearly half the price. Also some corporations like Spalding and Lego choose Springfield to be near their manufacturing facility or home office."

"Our business is connected to the improved economy," said DeLand, "There is no sign of decreased business travel, rather the economy fosters increased business functions and more time on the road. Springfield is doing things right and things are going well in the whole local economy not just the hotel industry. I think we all will reap the benefits."

Even thought the Springfield Holiday Inn is not expanding its number of rooms, it is taking advantage of the strong market to undertake an extensive $2 million renovation.

"We've had a good run, especially this last year and we want to put it back into the business," said Steven Stein, general manager of the Holiday Inn.

Though the Holiday Inn cooperates with the Sheraton and Marriot to host conventions and business functions, Stein noted the largest demand was for leisure travel.

"Springfield has become a magnet for leisure travel. We are at the crossroads of New England and have easy access to Bradley airport or an easy drive from Boston, Hartford, Albany, or New York," said Stein.