Times are tough now for the Boston area hotel market, but better times lay ahead, according to PKF Hospitality Research (PKF-HR), the research affiliate of PKF Consulting.

The firm’s latest batch of statistics found that year-over-year revenue per available room (RevPAR) growth should resume in fourth quarter 2010. However, until that point, area hotels will continue to face very challenging market conditions.

The current PKF-HR forecast for the Boston area lodging market calls for continued performance declines in 2009 and 2010, before double-digit RevPAR growth in 2011 and 2012.

The Boston market is entering the back-half of the lodging market cycle, having reached a definite turning point in mid-year 2009. While performance will continue to decline after the turning point, overall declines are not expected to be as severe, the firm noted.

Upper-priced hotels are expected to have the second-worst year in recent history in 2009, with a 20 percent decline in RevPAR. Since 1988, only 2001 was worse, with a 20.5 percent RevPAR decline.

Unlike the prior downturn, though, the market is only expected to have a 1.7 percent decline in 2010, the year following the bottom, whereas in 2002 the market experienced a 10.7 percent RevPAR decline, PKF-HR said.

Lower-priced hotels in 2009 are on pace to have the worst year since 1988 with a 17 percent decline in RevPAR. In 2010, PKF-HR predicts a nominal decline in RevPAR (-0.1 percent), before the market rebounds in 2011.

Hope On Distant Horizon For Hub-Area Hotels

by Banker & Tradesman time to read: 1 min
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