United States -  Boston

The hub of New England's economy, Greater Boston is one of the world's well-known intellectual centers, home to both Harvard University and Massachusetts Institute of Technology (MIT), as well as numerous other universities and colleges. The medical industry also plays a vital role, spanning many world-class hospitals including Massachusetts General, Dana Farber, Brigham & Women's, and Beth Israel Deaconess. Other major industries include finance, technology, and bio-pharmacology. Prior to the onset of COVID-19, economic performance in the regional hotel market had already begun to slow, with sub-inflation gains in RevPAR recorded from 2016 through 2019. Although underlying economic conditions remained sound through year-end 2019, significant increases in supply created softness in the market. The number of occupied rooms continued to grow in 2019, but the gain of 0.9% was far surpassed by the 3.2% increase in supply, as seven new hotels opened in 2019.

Boston’s 2021 RevPAR level was roughly half of the 2019 level; however, lodging metrics rebounded in 2022, with RevPAR registering just below the pre-pandemic performance. After adjusting for inflation, these results are less positive, but the turnaround still represents a notable achievement, particularly considering that demand recovery related to international travel, transient corporate business, and conventions has continued in 2023. Recent RevPAR performance has returned the Boston market to its historical position among the top 25 markets in the country, with Boston registering the sixth-highest RevPAR level in 2022, behind only New York City, Oahu, Miami, San Diego, and Orange County, yet ahead of San Francisco and Los Angeles. Boston has rebounded much faster than other top-tier cities in the Northeast, including Washington, D.C., and Philadelphia. Positive trends continued through year-to-date 2023, in part because any effects of new supply were muted. While high interest rates, elevated construction costs, and lasting pandemic impacts have created a challenging environment for developers, these factors have benefitted owners of existing hotels.

* Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent “big picture” data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Change In Value For Market:

Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: More than -10%

For more information, please contact:

Brian Bisema
Managing Director
Valuation, Market & Feasibility Consulting
[email protected]
  • +1 781 454-8930 (w)