$29 billion Deloitte to get aid package
The accounting firm Deloitte’s presence in Connecticut will be enhanced after the company was selected as the seventh recipient of a generous state financial assistance package through the First Five (Plus) Program.
On August 1 Gov. Dannel P. Malloy announced that Deloitte will receive between $9 million and $14.5 million in state grants over six years in exchange for broadening its footprint and creating more jobs.
“By securing a company like Deloitte, we are not only creating good paying jobs with good benefits in our state, we’re making our state a better place to do business,” said Malloy in a statement.
The agreement calls for Deloitte to create between 200 and 500 new jobs through an expansion of its existing Stamford, Hartford and Wilton offices, while keeping the 1,153 workers it already employs in the state. The project is estimated to cost $16 million.
Total financial assistance from the state will be awarded over six years. It includes $9 million if all current jobs are retained and 200 more created by December 31, 2013; $2.5 million more if 1,353 jobs are kept and 150 more jobs are created by December 31, 2018; and an additional $5.5 million for creating 150 more jobs by the end of 2018, for a total of 1,653 retained and new positions after six years.
According to its 2011 annual review, Deloitte’s revenues for its U.S. operations were $11.94 billion for the fiscal year that ended on May 28, 2011. The company’s total revenues, including from international operations, were $28.8 billion. Its U.S. workforce, according to the annual review, rose from 42,367 in 2009 to 51,262 in 2011.
The First Five Program is a job-creation initiative spearheaded by the Malloy administration. It is funded through the state’s Department of Economic and Community Development.
“With Gov. Malloy’s First Five program,” noted DECD Commissioner Catherine Smith in a statement, “we’re helping Deloitte reduce its operating costs and expand its Connecticut operations, which ultimately will position the company for future growth.”
Deloitte offers professional services that include financial advisory, tax, audit and consulting to a variety of industries. The jobs created in Connecticut through the First Five Program will range from entry-level to executive, according to the governor’s office.
BRIDGEPORT — More than 400 people gathered at Steelpointe Harbor July 8 to welcome a major anchor tenant — national outdoor retailer Bass Pro Shops — to the 50-acre development on Long Island Sound.
Mayor Bill Finch, Gov. Dannel Malloy, Bass Pro Shops Founder Johnny Morris, developer Robert Christoph Sr. and others were on hand to unveil the plans for the 150,000 square-foot store.
“Today’s announcement marks a historic moment for the city of Bridgeport and Steelpointe Harbor,” said Finch. Bass Pro Shops’ investment in Bridgeport will create hundreds of jobs, generate new tax revenues and bring economic growth to the city.”
The announcement was the culmination of almost a year of discussions and meetings between the city, state economic-development officials and Bass Pro Shops.
Bass Pro Shops’ mega-sized outdoor stores are known for combining retail with entertainment, conservation and outdoor education. The Springfield, Mo.-based retailer hosts some 113 million shoppers visiting its 58 stores in the U.S and Canada each year. The average customer stays 2.5 hours and drives an average of 50-plus miles. Bass Pro Shops was recently named by Advertising Age magazine as one of the “Top 10 Hottest Brands in America.”
State’s hospitality industry on the rebound
Like many if not most other industries in the state, Connecticut’s lodging sector suffered an economic blow when the recession hit four years ago.
Yet hoteliers say they are determined to regain their early 2008 sales volume.
“The economy’s very fragile,” concedes Bill McGarry, general manager of Holiday Inn Bridgeport. “You have a good month followed by a not-so-good month. We can’t really seem to get any momentum.”
While the economic situation is improving in slowly, “We haven’t gone back to pre-recession numbers,” McGarry acknowledges.
Christopher Barstein, general manager of Water’s Edge Resort & Spa in Westbrook, is beginning to see the tide turn, albeit slowly.
“We saw an uptick last year,” he says,. “In 2009 it probably bottomed out. [Business] picked up in 2010 compared to 2009, and in 2011 it picked up over what we had in 2010.” Nevertheless, Barstein concedes, business activity remains “a far cry from what we were seeing in 2007” before the economic downturn.
Dinu Patel, owner and general manager of Rodeway Inn & Suites in Branford, agrees. “It’s better than before,” Patel says of current business activity compared with two or three years ago. How rapidly it improves depends on “multiple issues,” he says. Those issues include the cost of fuel and fallout from the recently raised hotel tax.
In Patel’s opinion, “The tax is number one” among variables that impact the hotel business, he says. Under the administration of Gov. Dannel P. Malloy, the state’s lodging tax was raised to 15 percent, up from 12 percent, beginning July 1, 2011. The lodging tax applies to hotel room rental for less than 30 consecutive days.
In addition to tourists, some of Patel’s business stems from the construction industry — companies that bring laborers to the state temporarily to work on building projects. Many of these workers come from states such as Oklahoma, Georgia and Louisiana, notes Patel.
The cost of lodging workers is among direct and ancillary costs of doing business in Connecticut that construction companies consider, Patel explains. And when a business decides to bypass Connecticut in favor of another state where costs, including the hotel tax, are not as high, Patel loses business.
Truck drivers, also, are “a good part of our business,” says Patel. But compared with states such as New Jersey and Massachusetts, Connecticut fuel costs, including the gasoline tax rate, are decidedly higher, he says.
“They [truck drivers] are not going to buy gas in Connecticut,” says Patel. He says truck drivers probably bypass Connecticut when they need to fill their tanks with diesel fuel. Those potential hotel customers, he adds, also are more likely to drive through the state than make a rest stop for an overnight stay.
“At the end of the day, what I can put in the bank, that’s what counts. And that’s what hurts,” says Patel
On a typical day last month, the user-interactive gas-price reporting site GasBuddy.com showed prices in Connecticut ranging from a low of $3.68 in Stratford to a high of $4.31 in Stamford. (In Branford, where Patel’s hotel is located, the price range was $3.83 to $3.99.) That compares with a statewide range of $3.42 to $4.15 in Massachusetts, and $3.23 to $4.07 in New Jersey, supporting Patel’s assertion regarding vehicle fuel costs.
Like Patel, Barstein says he’s “not at all happy with” with the hotel occupancy tax and believes it could harm business. Neither, adds McGarry, did consolidating the state’s tourism districts into three regions help the hotel industry .
“It doesn’t give us the ability to really market the region,” he says.
The state has opted to promote tourism with a broad, sweeping brush, establishing a potent brand by focusing and building on leads from potential tourists that would bring them to the state. This current, relatively lush tourism marketing landscape is completely different from the dry terrain of former governor M. Jodi Rell’s administration, when a mere $1 annually was allotted to market the state as a tourist attraction. Officially launched last month, the new “Connecticut: Still Revolutionary” tourism campaign aims to reel in revenue through popular destinations such as Mystic Aquarium and less familiar (to out-of-staters) resources such as the state’s beaches, museums and art galleries. Grants also are available to tourist attractions for various regional efforts. (See sidebar.)
“After having a dollar, this is certainly going to put a focus on Connecticut, put it back in the game,” says Ginny Kozlowski, executive director of the Connecticut Lodging Association.
The federal government also recognizes tourism’s importance for the hotel industry and the economy overall, including its job-creation potential. The focus has now turned to proactively attracting and welcoming visitors, after a post-Sept. 11, 2001, period during which travelers were met with heightened scrutiny because of national-security concerns.
In January, in an effort to make the United States a global travel destination, President Barack Obama signed an executive order establishing the Task Force on Travel & Competitiveness. Co-chaired by U.S. Secretary of Commerce John Bryson and U.S. Secretary of the Interior Ken Salazar, the aim of the task force was to create a national travel and tourism strategy that will result in increased tourism in the United States among both domestic and international visitors.
On the international side, the long-term goal is to attract “100 million international visitors, who we estimate will spend $250 billion, annually by the end of 2021,” according to a recently released task force report.
The national tourism push was encouraged by the American Hotel & Lodging Association (AHLA), which in 2009 found fault with the economic stimulus bill Obama signed into law. AHLA said the bill lacked initiatives to boost U.S. travel and tourism.
The U.S. lodging industry generates $134 billion annually, according to AHLA. The organization reports that in Connecticut in 2008 there were 366 lodging properties that generated $940 million in direct sales, 14,023 lodging jobs and $655.8 million in employee wages.
“I think the industry not just in Connecticut but across the country was impacted by the recession,” says Kozlowski, who also is president/CEO of the Greater New Haven Convention & Visitors Bureau. “I’ve seen businesses close and move away, and contract on their business-side spending. That’s been a concern.” Kozlowski adds that the hotel industry has also had to contend with the public-relations fallout from adverse publicity surrounding companies that received government bailouts but spent questionable amounts of money on travel and hotel expenses.
In addition, periods of harsh weather over the past couple of years have impacted the hotel industry, adds Kozlowski.
“We do not need another hurricane [such as Tropical Storm Irene that last August caused massive power outages]; we do not need another snow storm,” says Kozlowski.
What the lodging industry does need, and what the renewed emphasis on travel and tourism seems poised to exploit, is to let potential visitors know what Connecticut has in store for them. That includes, in addition to cultural and leisure attractions, comfortable, accommodating and affordable lodging, Kozlowski says.
“We’ve got some great bed-and-breakfasts, historic places, so we should take advantage of [promoting] them,” Kozlowski says, adding that being more proactive in attracting visitors is important. “Attitude definitely counts for a lot. You have to be customer-friendly and responsive.”
It’s a reminder that Water’s Edge Resort & Spa’s Barstein, who oversees a facility already accommodating toward its clientele, believes is even more important now.
“We’ve rolled out almost everything,” says Barstein. “What we’re trying is to show value proposition.” So every night something special is offered. On Sundays, for example, there’s a popular brunch and later that evening an endless dinner buffet is available for $21.95. On Fridays a traditional Italian dinner is offered.
“And we’re always reworking our overnight packages,” offering different bundles that include meals and other amenities, says Barstein.
There also are special-occasion offerings. One of the newer ones is the hotel’s “Babymoon” package.
“It’s like a honeymoon, but it’s for couples expecting a baby,” kind of a celebratory vacation together before a newborn’s arrival, Barstein explains. He heard someone talking about it, did a little research, and decided to offer it to customers.
“So we’re always trying to find out what our guests want,” he says, adding that hotels must pinpoint and promote their strengths in order to pull through the recession. “People are coming to enjoy the beach, the pool, the spa” at Water’s Edge, Barstein notes. “For us, we are really a destination resort.”
Along with its new overnight packages, Water’s Edge recently unveiled a brand new outdoor pool and pool deck, demonstrating that even with the slowed economy the resort still emphasizes quality services.
“When you start shrinking to fit what’s going on, you start damaging the product,” Barstein says. “You have to push that top line with different packages. If you want to just roll up in a ball and wait for this to pass, you might not be there in the end.”
There are some adjustments that must be made, however, to stay afloat. For example, while still maintaining service quality, the Holiday Inn Bridgeport has shortened its restaurant hours. That saves on expenses, says General Manager McGarry. Nevertheless, he sees the economic state as a “glass-half-full” situation.
“I’m very optimistic,” says McGarry, referring to Connecticut’s travel and tourism priority and how it affects the hotel industry. “If the Barnum Museum gets a grant, then that helps me because it’s right nearby. I’m hoping the new ads will have an immediate impact. So we’ll take it from there.”
“Hopefully it’s [the economic situation] going to turn around,” says Rodeway Inn & Suites’ Patel. Among his ways of addressing the economy’s impact is paying more attention to social media — using it to promote his hotel to potential lodgers, and then seeing guests utilize it to write a review, which could attract more customers.
“So you’ve got to keep up with that,” says Patel, adding that the reach of social media and other marketing tools have far-ranging possibilities. “This is not a local economy. It’s also a global economy.”
But in realizing new customer-base possibilities, the hotel industry should not forget elements that have traditionally attracted visitors. They should market themselves in accordance with those proven strengths, says Kozlowski.
In the New Haven area, for example, “to generate visitors from outside a 50-mile radius, Yale clearly is a top attraction,” she says. Also, “obviously there’s a great shoreline, and there are outdoor attractions, and the vineyards are really drawing lots of people.”
New local developments also should not be overlooked as industry boosters. In the New Haven region there soon will be a new School of Medicine at Quinnipiac University, and Yale is planning to build two new residential colleges. Additional colleges mean more alumni [for] reunions, and those alumni will need a place to stay when visiting their alma mater, notes Kozlowski.
Locally based foresight and creativity, along with regional collaboration, should help the lodging industry bounce back from the economic downturn, says Kozlowski, who attended a statewide conference on tourism in May. The event’s marketing emphasis included coordinated branding, establishing partnerships and cooperative advertising.
“I think it’s very important that we all come together,” Kozlowski says. “The potential for growth in tourism is great. I think the [state marketing] campaign is going to take advantage of it.”
Don’t emphasize new changes.
Don’t tout efforts to attract businesses.
And definitely, for anyone trying to promote the state of Connecticut to tourists, don’t describe its residents as smart.
“Intellectually enriching,” maybe. But not “smart.”
Those and other findings were uncovered through a marketing study commissioned by the state to learn how best to create a Connecticut brand that will attract throngs of tourists. To help “sell” the state to potential visitors, the state’s Department of Economic & Community Development engaged a team consisting of New York marketing firms Chowder Inc., and Fleishman-Hillard, Media Storm of South Norwalk, as well as Waterbury’s Harrison Group.
In addition to assembling out-of-state focus groups and conducting and analyzing research, the marketers have been charged with helping to create effective advertising, developing media strategies, keeping abreast of exploitable goings-on and trends in the state, engaging consumers through social media and other communications channels, producing newsletters, and conducting information sessions with stakeholders.
Over the next two years the marketers will work with a $27 million budget to convince vacationers that Connecticut is the place to be in the summer, and during the rest of the year as well, for any discretionary excursions they plan on taking. Providing the funds are a priority for Gov. Dannel P. Malloy’s administration, which recognizes tourism as a crucial element in the state’s economic recovery. Malloy also made sure Connecticut came up with $100,000 in dues to renew its lapsed membership in the multi-state tourism marketing collaborative Discover New England, which particularly tries to attract visitors from the United Kingdom, Ireland and Germany.
It’s a far cry from the $1 budgeted for tourism during the tenure of former governor M. Jodi Rell.
“That was scandalous. The dollar was an insult,” says Christopher Barstein, general manager of Water’s Edge Resort & Spa in Westbrook. What Rell failed to realize, says Barstein, is that “The money the state spends on tourism is just an investment.”
The current governor agrees. In a press release from Malloy’s office that cites 2011 statistics, Connecticut tourism is said to generate $11.5 billion in annual spending and $1.15 billion in state and local revenue from taxes.
Among findings in the state’s 2012 “Connecticut Tourism: What’s New” research report is that focus groups saw Connecticut as a drive-through state rather than a vacation destination. Many of the respondents — a total of ten groups based in Massachusetts, New Jersey, Pennsylvania and Texas — were unfamiliar with Connecticut’s rich cultural, recreational and historic attractions. Some respondents even had a negative view of Connecticut, describing it as lacking both urban attractions and beaches, non-stimulating, “horrific” in terms of roads and traffic, expensive, catering only to the affluent and generally unappealing.
Taking that information, the report suggested conceptual minefields to avoid when seeking to attract tourists. Calling Connecticut residents “smart” or the “best educated,” for example, might be construed as an insult to non-residents. According to the study, concepts and images that would be more tourist-friendly include the state’s beaches and other leisure destinations, its gaming industry, family-oriented attractions such as Mystic Aquarium, scenic streams and lakes, and theaters, museums and other artistic and cultural activities.
Focus-group responses, along with thoughts from Connecticut residents about their favorite aspects of the state, helped shape the marketing campaign designed to draw in tourists. The theme of that campaign, unveiled last month, is: “Connecticut: Still Revolutionary.” The point is to inspire and invoke the state’s rallying spirit, according to a press release from the governor’s office.
“I kind of liked it. It’s catchy,” says Barstein, adding that the slogan piques the interest of those unfamiliar with the state. “Any time you’re doing branding like that, where the phrase is not obvious, it makes people think.”
And, he and others hope, want to come to Connecticut to find out more.
UConn: State’s future ‘bleak’ for new job creation
STORRS — Well, at least it wasn’t Labor Day.
Just in time for Memorial Day, the University of Connecticut’s Center for Economic Analysis is Connecticut Economic Outlook report for May. And the news is pretty bleak.
Connecticut’s prospect for economic growth over the next two years is “weak,” the report says, and the state’s demographic trajectory is “bleak.” That’s in part because the state has failed to create any net new jobs in more than two decades, laving it unable to retain young adults or attract any significant new population.
That leaves a population that is aging rapidly — the 65-and-older age cohort has doubled, the working-age population shrinking and the “dependency ratio” (the ratio of the working age population to those under 18 and over 64) is soaring.
The alter its demographic destiny, according to the report, “The challenge is not just to replace all 120,000 jobs lost since 2008, but to drive creation of substantially more — at least 50,000 net new — to retain and attract new workers.”
The report cites a couple of hopeful signs — the creation of the Farmington campus of Jackson Laboratories is one — but emphasizes that No current policies or initiatives come close to reaching the goal in job creation that Connecticut must reach to address its demographic challenge.
During the first quarter of 2012, Connecticut’s seasonally adjusted employment rose to 1.63 million, 2,000 higher than the previous CCEA forecast. That modest positive news is balanced by the CCEA’s forecast of just 32,000 new jobs created by the first quarter of 2014, most stemming from projects already in the pipeline, such as the UConn Health Center’s new Biosciences Center.
One remedy the authors of the report advance: “that the state unleash existing stranded tax credits in a highly targeted program to drive economic growth.”
How exactly would that work?
“If the $2.5 billion in tax credits currently sitting unused and unusable on balance sheets could be redeemed ex post against the cost of major capital projects — effectively converting what is a now a liability against state tax revenue into an investment fund — this approach would create nearly ten million square feet of new advanced manufacturing, pharmaceutical, biomedical and other facilities, creating upwards of 100,000 new net jobs,” according to the CCEA report.
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