Mohegan Sun defies downturn to fill hotel

William Sokolic

They’re not gambling as much. They don’t spend as much in the restaurants. But visitors to Mohegan Sun are staying overnight in higher numbers.

Go figure.

Mohegan Sun’s average hotel occupancy of 95.6 percent is up 3.2 percent for the first quarter of fiscal year 2009, which ended Dec. 31. By contrast, occupancy nationwide fell for the quarter, reaching double digits in November. The picture was worse in Connecticut, where hotel occupancy tumbled in double figures the entire quarter.

“With the economy, hotels in Connecticut are facing a down time right now,” said Randy Fiveash, tourism director for the Connecticut Commission on Culture & Tourism. So is just about every other state, he said. “It’s not good news.”

True, casinos give away a lot of their rooms, something other hotels can’t afford to do. But Mohegan Sun has bucked national travel trends. Occupancy rose in the third fiscal quarter of 2008 as well, a period when Atlantic City saw a dip in hotel stays.

Foxwoods did not provide occupancy numbers. Foxwoods added the MGM Grand at Foxwoods in 2008, bringing the total number of hotel rooms to 2,200.

Room rates are down, helping to address occupancy levels.

“We’re giving gamers more discounts to enjoy a mid-week getaway,” said Joe Jiminez, senior vice president of casino marketing at Foxwoods.

Then again, rates have tailed off in Connecticut and the United States as lodging companies try to woo customers. In the nation’s financial mess, people are being more careful about spending money.

“The same customer from last year is playing down 10 to 15 percent in the casino,” Jiminez said.

Restaurant covers dropped the last two quarters, said Mohegan Sun chief operating officer, Jeff Hartmann. “Visitors have less discretionary income to spend,” he said.

The average rate is under pressure to keep from going up, Hartmann said.

“We forecast a decline in rates for 2009,” he said. “All major hotel companies have declining rates. Room offers from Atlantic City put pressures on the rate for our hotel rooms.” 

Groups canceling

Group sales have followed a national trend, with cancellations late in 2008 and early this year.

“To a lesser extent we compete with Atlantic City for group business,” Fiveash said. “But we compete more so with Hartford, Providence, Boston and New York.”

Mohegan Sun is not seeing a change in demographics — 45 percent of guests come from Connecticut, 23 percent from New York and 22 percent from Massachusetts.

Foxwoods does not compete much with Atlantic City for guests. The top feeder market is Massachusetts, followed by Connecticut and New York.

“We’re seeing more people who would go to the islands and Las Vegas and now stay closer,” Jiminez said.

Connecticut also has taken steps to offset the downfall, Fiveash said. Marketing a closer-to-home vacation strategy that capitalizes on the state’s location between Boston and New York, for example. Giving more value, more bang for the travel buck, for another.