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The Boston Harbor Hotel has completely shut its operations in the face of the COVID-19 pandemic. File photo
A report says Boston’s lodging market has been among the nation’s hardest-hit by the coronavirus epidemic, and the effects could linger for years similar to the wake of the 9/11 terror attacks and 2008 financial crisis.
Boston-based hospitality industry consultants Pinnacle Advisory Group says occupancy rates at Boston-area hotels cratered in the first half of March, with many hotels in Boston operating at single-digit occupancy levels. Others including the Boston Harbor Hotel and Long Wharf Marriott have temporarily suspended operations, with shutdowns at those properties and others representing 20 percent of the market’s total room supply.
“All things considered, owners and operators are managing a dire situation: one that is difficult to predict an end,” Pinnacle Vice President Sebastien Colella wrote.
Government-imposed bans on large gatherings beginning March 13 quickly led to steep declines in revenues per available room (RevPAR), a key metric of a hotel property’s financial performance. Boston and Cambridge hotels experienced a 72 percent decline in RevPAR on March 14, the steepest of any top-25 U.S. market.
The unexpected shutdown came as the region’s hotel industry adds an estimated 3.8 percent in room inventory, which was expected to be offset by a 25 percent increase in bookings associated with events at the Boston Convention and Exhibition Center and the Hynes Convention Center, Pinnacle reported.
Those projections were rendered moot this month as a meeting by the International Antiviral Society went virtual and the Diversified Communications Seafood Expo was postponed. The two events would have accounted for 31,000 room nights.
RevPAR at Boston and Cambridge hotels previously had increased 5.8 percent in the first two months of the year, helped by a 8.7 and 5.5 percent increase in room nights.
The federal stimulus package contains potential relief for the industry. The $350 billion small business loan program includes a provision that would allow hotel owners to qualify, even if they have more than 500 employees and own multiple properties, The New York Times reported.
