Boston hotels report February chill due to poor weather, drop in events

Greater Boston’s hotels reported decreased operating results in February.

Thomas Grillo
Real Estate Editor- Boston Business Journal

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Greater Boston’s hotels said poor weather and a decrease in major convention traffic were mostly to blame for their showing in February, marking a rare setback for an industry that has seen solid growth for several years running.

PKF Consulting and Hospitality Research, which surveyed 96 local hotel operators, found the Boston area had an average occupancy rate of 60.5 percent and an average daily room rate (ADR) of $153.64 in February. Taken together, those metrics combined for average revenue per available room (RevPAR) of $92.91.

On a year-over-year basis, occupancy was down 3.2 percentage points while ADR was up 2.5 percentage points over February 2013’s levels. The net result was a 0.8 percent decline in RevPAR from the level hit a year earlier.

According to PKF, all Greater Boston submarkets experienced year-over-year decreases in occupancy except for the Route 128 region, which saw a 2.3 percentage point increase. The Route 495 South region was especially hard hit with an occupancy decrease of 10.3 percentage points.

PKF said all submarkets experienced increases in ADR except for the Route 128 and Route 495 North markets. 

Overall, Cambridge achieved the highest occupancy among all submarkets at 65.7 percent, followed closely by Boston’s downtown at 65.2 percent.

The submarket highlights included:

• Route 128:  Year-over-year occupancy was up 2.3 percentage points (59.3 percent) in February, ADR was down 11.9 percent ($97.23)and RevPAR was down 9.8 percent ($57.62)
• Route 495 North:  Year-over-year occupancy was down 2.4 percentage points (52.2 percent) in February, ADR was down 0.6 percent ($101.56) and RevPAR was down 3 percent ($52.99)
• Route 495 South: Year-over-year occupancy was down 10.3 percentage points (47.1 percent) in February, ADR was up 1.7 percent ($101.84)  and RevPAR was down 8.8 percent ($48.01)
• Downtown hotels led ADR growth with a 6.9 percent increase ($177.48) while occupancy fell 3.8 percentage points (65.2 percent) and RevPAR was up 2.9 percent ($115.76)
• Cambridge saw occupancy fall 3.8 percentage points (65.7 percent), ADR increase 5.8 percent ($175.53) and RevPAR increase 1.8 percent ($115.30)

Analysts say one reason why hotel occupancy fell in February stemmed from the fact that the Yankee Dental Congress convention, which typically books more than 15,000 room nights in Boston, was held in January, as opposed to February, resulting in a loss of occupied rooms. In addition, the convention segment fell by 2 percent due to weather-related cancellations.