| Anticipated increases in Boston room rates factored into a Toronto company’s acquisition of the Battery Wharf Hotel in the North End for $48.6 million, according to an executive.
The 150-room waterfront hotel is the first New England acquisition for Westmont Hospitality Group, which owns and operates approximately 450 hotels worldwide.
"The Boston market finally broke through the 80-percent occupancy level and it looks like that’s sustainable for many years," said Greg Bingamin, Westmont’s director of asset management. "In the hotel business, generally occupancy recovers first, and then average daily rates. We think that Boston is poised to have significant rate growth."
The occupancy rate at Boston hotels was 79.5 percent during the first 11 months of 2014, according to a recent report by PKF Consulting USA. Average daily room rates were $204, up 18 percent from 2013. Increased bookings from citywide conventions have boosted the area’s hotel market this year, according to PKF.
Westmont, which acquired the property in October in a partnership with Thomas Tan of Bestford Hospitality Group, ended the affiliation with Fairmont Hotels & Resorts and dropped its name from the hotel. Bingamin said the lack of a national hotel brand won’t be an impediment.
"It’s consistent with the philosophies in the North End of authentically local businesses and not just slapping a big brand on something," he said.
Fairmont Hotels & Resorts agreed to become operator of the hotel months before its opening in 2008 following the departure of Regent Hotels and Resorts, which was in a dispute with the developers of the waterfront complex.
No major physical upgrades are planned to the building, Bingamin said.
"We can focus our capital costs on where it makes an impact on the guest. We’re not purchasing boilers and chillers," he said. "We think the greatest hotels have people behind them and are really driven by personal service and amenities."
The hotel contains a 13,000-square-foot Exhale Spa but currently has three retail vacancies. Westmont has hired Wilder Cos. of Boston as its leasing agent for two ground-level retail spaces that are 7,200 and 2,400 square feet, along with a 5,400-square-foot second-floor suite with harbor views.
