Monday, July 16, 2012
Despite the fact that Boston will host fewer large conventions in 2013, Boston hotel occupancy levels are expected to increase next year, according to PKF Hospitality Research LLC, which tracks industry trends.
PKF reports that Boston area occupancy rate is projected to increase by 0.7 percent in 2013. Meanwhile, citywide convention activity will be down in 2013 from 2012 levels. Citywide conventions are defined as groups that occupy 2,000 or more hotel rooms on a peak night.
“The greater Boston market is remarkably balanced between large conventions, small groups, individual business travelers, and tourists,” said Andrea Foster, vice president and director of hospitality services in New England for PKF Consulting, in a statement. “Generally speaking, when one demand segment is not filling our hotels, other demand segments are being accommodated. This is evidenced by the 71.1 percent occupancy achieved by the Greater Boston hotel market in 2011, the highest occupancy in the market since 2000, and the same year the market experienced the lowest level of citywide convention demand since 2005. Further, with continued projected growth in lodging demand and extremely limited supply increases, Boston is well poised to continue increasing occupancy to reach historical highs.”
Convention group demand has accounted for approximately 4 percentage points of annual occupancy for Greater Boston hotels, or 5.6 percent of total Greater Boston demand, over the last 11 years, according to PKF.
“[Although] convention demand does not have a significant impact on overall hotel occupancy in the Greater Boston market, such demand does have a positive impact on average daily rate (ADR) due to the room night compression it generates,” Foster said in the statement. “Our models show that convention demand has a significant positive effect on Boston ADR’s for both upper and lower priced hotels.”