Bradley Airport, Hartford hospitality industry pivot as business travel slowdown likely to persist - Hartford Business

Bradley Airport, Hartford hospitality industry pivot as business travel slowdown likely to persist - Hartford Business

Bradley International Airport wants to expand its leisure travel offerings as an increasing number of newly COVID-19-vaccinated people itch to take vacations they’ve postponed for more than a year.

That’s a shift for the Windsor Locks-based airfield, which has long depended on business travelers for the majority of its business.

In fact, about 65% of Bradley’s customers have traditionally been business travelers. But that was before the pandemic.

As the tourism industry looks to rebound from COVID-19 this spring and summer, business travel, both in Connecticut and around the globe, is expected to make a much slower comeback as companies think twice about hosting large or even small gatherings, or sending their employees to meetings and conventions.

That will have significant implications for Greater Hartford, and many businesses — like the airport, convention center, hotels, etc. — that cater to those kinds of travelers. It’s also forcing some in the hospitality industry to rethink their mix of services to try to fill in the resulting revenue gaps.

“The big question mark for us is how long will it take for business travel to return,” said Kevin Dillon, executive director of the Connecticut Airport Authority, which oversees Bradley Airport. “We’re continuing to press all of the [airline] carriers that operate here that there are other opportunities.”

Cautious approach

Judging by conversations attorney Patrick McHale has had with clients, businesses aren’t eager to resume pre-pandemic travel anytime soon. McHale, a partner at Hartford labor and employment law firm Kainen, Escalera & McHale PC, said many of his employer clients say they’ll probably keep workers largely grounded for the next six to 12 months.

Right now businesses are even being cautious about bringing workers back to the office, McHale said, and clients that had planned to host events as late as Nov. 2021, are canceling them.

Patrick McHale

“Until we get everybody back to work, businesses are not going to be mandating employees get on a jet and fly somewhere until they’re comfortable,” he said.

McHale’s clients don’t appear to be outliers. The Global Business Travel Association (GBTA) recently reported that business travel in North America was down 79% from April 2020 through the end of last year. The group is forecasting a 21% increase in business travel this year — with most gains coming toward the end of 2021.

Even more concerning is that GBTA predicts business travel — which generated $334.2 billion in spending in 2019 — won’t return to pre-pandemic levels until 2025, four years from now.

A likely slow recovery is why Dillon is currently focused on attracting airline routes desirable for vacationers, who are more likely to get on planes in the coming months.

Dillon said the airport is starting to see an uptick in activity — passenger traffic is currently down about 65% from pre-pandemic levels, an improvement from about a 75% decline just a few months ago.

Dillon said he thinks leisure travel will begin a significant recovery starting this summer, and some recently introduced nonstop routes — like a JetBlue direct flight to Miami starting in June — reflect that. He’s also courting airlines for a route to Jamaica, calculating there could be pent-up demand for travel there among Greater Hartford’s large Jamaican population.

Other Greater Hartford businesses whose customers skew mostly toward business travelers will likely feel the pinch as well, said Michael Freimuth, executive director of the quasi-public Capital Region Development Authority (CRDA), which oversees the Connecticut Convention Center.

Mike Freimuth

“This all leads to a slower recovery for jobs within hotels, restaurants and ancillary services (vendors delivering food, laundry cleaning, etc.),” Freimuth said. “Corporate spending for entertainment will also take a while to recover as will convention/conference business and trade shows.”

The Connecticut Convention Center in Hartford hasn’t hosted an event since a wedding on March 14, 2020, General Manager Michael Costelli said. The building is currently hosting COVID-19 testing and vaccination efforts, and is scheduled to reopen for events on Sept. 1, with its first — ConnectiCon — planned for the weekend following Labor Day.

Costelli said he expects the Convention Center this year to generate about half the revenue it did pre-pandemic, with the slowdown lasting for another 12 to 18 months.

“Things are ugly,” Costelli said.

To make up for large industry shows like the Northeast RV & Camping Show and Connecticut Home & Remodeling Show, Costelli is looking at smaller regional and educational events that cater to school groups, like a dinosaur exhibition, he said.

In addition to the Convention Center, hotels and other venues that host large events have suffered throughout the pandemic, and that will likely continue for a while, said Robert Murdock, president of the Connecticut Convention and Sports Bureau (CCSB), which markets the state’s venues for conventions, meetings, sports and other attractions.

“We do see some conventions and business meetings scheduled for the fall of this year… but more people are waiting until 2022,” Murdock said. “For Hartford they definitely relied more on the corporate travel, so the city has been hit harder from COVID losses than the shoreline, for example.”

For now, CCSB is mostly marketing Connecticut venues to business groups from regions within driving distance like Albany, New York and northern New Jersey. Companies are more likely to feel comfortable sending employees to an event they can get to by car rather than air travel, Murdock said

Technology pivot

As of December, business at Connecticut hotels was down by 57%, said Ginny Kozlowski, executive director of the Connecticut Lodging Association, a trade group that represents and promotes hotels in the state.

Ginny Kozlowski

Hotels in large urban centers like Hartford are experiencing some of the most significant financial hits because they rely more heavily on business travel, including hosting events and meetings. Federal support programs like the Paycheck Protection Program have helped and been critical to keeping these hotels in operation, Kozlowski said.

But some haven’t made it through. Last year, Downtown Hartford’s Homewood Suites and Red Lion hotels both permanently closed.

In a normal year the Hilton Hartford Downtown would be hosting the CT Barber Expo this month, in addition to numerous meetings and training sessions for corporations, General Manager Nick Lorusso said. However, none of those things are happening right now and the hotel isn’t hosting guests in town for conventions or meetings at other Hartford venues.

“You have no conventions, you have nothing from the corporations in downtown, you don’t have any training right now,” Lorusso said.

Last summer the Hilton’s owner, the Waterford Group, warned the hotel might close due to the drop off in corporate events and bookings amid the pandemic. The property was put up for auction a few months later, but didn’t receive an acceptable bid, according to Waterford Group. The starting price was $5.5 million.

Anticipating a long period of fewer large gatherings, the Hartford Hilton is investing in technology so that it can put on high-level hybrid events, Lorusso said. The hotel is optimizing its internet service and rethinking its meeting spaces to feature numerous cameras that can livestream events to make them more engaging for remote attendees.

In the coming months and possibly years, these kinds of offerings will probably be necessary for hotels that host business events, Lorusso said.

“It’s not something we can do as an amenity now,” he said.