Marcus & Millichap

New England Hospitality Research Report

New England Region, Second Half 2016

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Modest Performance Expected as Investors Eye Additional Hotels

Encompassing Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, the New England region is growing sufficiently to maintain high annual occupancy and support modest growth in revenue measures this year. The region’s hotels navigated a soft patch in the first six months of 2016, but stand to reverse those losses during the peak summer and early fall travel season. Amid an increase in room stock, key performance indicators in Boston softened in the first half of 2016, exemplifying the regional trend. Nonetheless, a growing local economy, as evidenced in job-creation trends, will provide opportunities for hotel owners to improve near-term operating results.

Deal flow in the region remains strong and centered primarily in Connecticut and Massachusetts. More branded properties came on the market in the past year, but independents continue to claim a share of the transaction market larger than in other regions of the country. Unflagged hotels are typically the mainstays of New England’s many small markets. Properly priced assets with longstanding demand drivers will continue to elicit intense interest when offered for sale.

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