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 countless other universities and colleges. The medical industry also plays a vital role, spanning numerous 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 between 2016 and 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.
The COVID-19 pandemic significantly affected the Boston lodging market, as illustrated by the RevPAR loss of more than 70.0% in 2020. While significant gains were realized across all metrics in 2021, Boston’s RevPAR finished the year at roughly half the pre-pandemic level. Greater gains occurred in 2022, as international travel, corporate transient demand, and corporate group demand slowly recovered; demand from these segments should continue to increase throughout 2023. Furthermore, the market has largely absorbed the 1,054-room Omni Seaport, which opened in September 2021. This property is attached to the Boston Convention and Exhibition Center (BCEC) and is able to induce much of its own demand through its unique facilities and marketing efforts. Overall, Boston's 2022 RevPAR returned to its historical position among the top 25 markets, reporting the fifth-highest level behind only New York City, Oahu, Miami, and San Diego and ahead of San Francisco and Los Angeles.
* 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.
The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide.
Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the
hospitality investment market.
In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely
insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related
restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.
Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with
an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide
insights on the likely trajectory of decline and recovery for hotel values.
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