In 2019, Ginny Kozlowski is celebrating her 10th year as executive director of the Connecticut Lodging Association, which is headquartered in New Haven. In this edition of Suite Talk, Business Journal reporter Phil Hall visited with Kozlowski to discuss the trends and challenges facing the state’s lodging industry.
What is the overall state of Connecticut’s lodging industry?
“2018 (was) a good year. The state of Connecticut tracks on its fiscal year, which is July to June, so for that we had a 5.6 percent increase in hotel lodging taxes. The Stamford-Greenwich-Fairfield County area led the state in terms of occupancy and average daily rate, which is a great thing. The more people we have visit the state, the more taxes and experiences we generate.”
Why did Fairfield County lead the state in terms of lodging?
“One of the things that happened in 2018 was NBC Sports telecasting the Winter Olympics, so that was a big boost at that time of year, which tends to be a little bit slower due to weather-related travel. And, also, there are new businesses moving into Fairfield County. We’ve also seen an increase in consumer confidence, so we’re seeing increases in leisure, travel and business travel.”
In my travels around Connecticut, I believe that I am witnessing a growing number of extended-stay hotels. Is that an accurate observation?
“It is an accurate observation. One of the changing issues around the workplace is that people are being hired, particularly in the health care industry, for a short-term contract. So, for example, if you’re hired by Stamford Hospital to be either a travel nurse or you are here for a research project, you might be looking for a short-term stay.
“Generally, apartments or house rentals like to see an annual tenant, whereas people don’t want to be in a ‘hotel’ hotel — they’d like to be able to have a kitchen, whether they would use it or not, they’d like to be able to do their laundry and have all of those other services in an extended-stay hotel. And it is not that big of an investment in putting down a security deposit and first and last month’s rent.”
How has Airbnb impacted the Connecticut lodging industry?
“There was about $3 million generated on a (Fiscal Year 2018) basis from Airbnb because there is an agreement with the Department of Revenue Services to collect occupancy taxes on their stay. We understand early in 2018 that they were triple the pace they were in 2017.
“I think it is becoming more diverse around the state — Stonington was the second-most popular area in 2017 after New Haven. I think a lot of people who might have been renting property through realty companies for seasonal rentals are using the service. I think it will have an impact, but different people use it for different reasons.
“Airbnb is the only organization that the state of Connecticut has a revenue agreement with. Other services, such as FlipKey (an online vacation rental market), do not have an agreement. They have a different business model. But if they operate like a hotel, they should be able to pay the tax like a hotel.”
What are the staffing challenges within today’s lodging industry, and how are they being addressed?
“We have a tremendous shortage of staffing across the whole hospitality sector. From front desk to room attendant to dishwashers — the perception is that they are low-paying jobs without a lot of opportunity for advancement. And that’s just not the case.
This summer, we teamed with Workforce Alliance in New Haven on a free four-week program in partnership with the University of New Haven for folks to develop soft skills and get their serve-safe certificates. There were 20 people in the program and all of them left with a certificate and with jobs. We are looking to replicate that throughout the state.”
How does your association view the push to increase the state’s minimum wage?
“Obviously there is concern on how it is implemented. We understand from the Connecticut Restaurant Association that dishwashers are starting at $18 to $20 an hour, so the market is sort of self-correcting. I don’t know if raising the minimum wage will create a rollback in wages. If you need staff and want qualified staff, you need to compensate them.
“More hotels and restaurants will generate more demand, and we need more training programs. And we need to be flexible — that is one of our challenges as an industry. Not everyone can work full-time, not everyone can work weekends. If you are not going to be creative, you are not going to have staff.”
Where does the Connecticut Lodging Association stand on the effort by MGM Resorts International to bring a hotel and casino resort to Bridgeport?
“We have not had a discussion on the MGM project. I anticipate in the session there may be new legislation introduced. Clearly, it is something the association will look at. Currently, we have Foxwoods as a member and we’ve always worked closely with the casinos and tribes.
“One of the things we want to make sure is that we’re not poaching our own. If we don’t grow the pie and are just share-shifting, that is not good.”