Boston Hospitality Market Report

Encouraging full-service dynamics apparent. Among major U.S. hospitality markets, Boston noted one of the largest improvements in annual occupancy last year. The June-October stretch was largely to credit, with collective occupancy during the five-month window tallying 82.5 percent, a 10-basis-point gain over the same period in 2019. A level of demand above the pre-pandemic mark is especially noteworthy for this market, as upscale, upper upscale and luxury rooms comprise 72 percent of the local hotel inventory versus a national average of 54 percent. This suggests a host of travelers were willing to spend $200-$300 or more per night last year, an encouraging sign heading into a period of potential household discretionary budget tightening. While total bookings at these hotels are unlikely to reach 2019’s high, there will not be an increase in competition from new supply, as near-term completions are predominantly lower down the chain scale. The opening of new economy and midscale hotels may prove warranted, as demand for such rooms are forecast to exceed their 2019 benchmarks this year, contributing to an overall steady occupancy rate.