Industry Update
Press Release14 January 2021

Kalibri Labs Ahead of the Curve: Miami, FL

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Kalibri Labs

Boston's occupancy levels have been generally stable and well above their 20-year average since 2011. The year-end 2019 level of 75.6% was meaningfully higher than the longer-term average of 70.2%. RevPAR increased at an average annual rate of less than 0.8% since 2015, well below the Top 25 market average increase of 1.2% for the period. While occupancy levels pre-pandemic were attractive, strong supply increas- es and weakening international travel demand caused by a strong U.S. dollar environment hurt pricing power in recent years in Boston. • The estimated decline in the Boston hotel occupancy level from 2019 to year-end 2020 is -61.1%, significantly worse than the Top 25 market average decline of -48.3%. As a result of this weak occupancy level, the estimated decline in ADR for Boston in 2020 is significantly more than that of the Top 25 market average (-38.5% vs. -26.4%). These Occupancy and ADR contraction levels are expected to have resulted in a -76.0% decline in RevPAR for Boston in 2020 (vs. a -61.9% for the Top 25 market average). The Boston 2020 RevPAR contraction is one of the worst among the 65 markets tracked closely by CBRE (In contrast, the national RevPAR level is estimated to have declined by 50.9%; Jacksonville by 36.1% and Tucson by 34.2% in 2020 - best in the nation).

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The weak pricing environment that has persisted in Boston since 2015 (as noted above) will serve to prolong a recovery as Boston and the nation move towards a post-pandemic environment. While Boston is expected to return to 2019 RevPAR levels in 2025 (later than most), the previous peak RevPAR level of $154.02 will not likely be achieved until the later years of this decade. RevPAR change from 2020 through 2024 is forecast to average +42.6% during this period (well-above the Top 25 market average of 28.4%).

Like other urban, coastal markets, the delayed recovery anticipated for the Boston market comes from the historical reality that group-related demand and inbound international travel have represented a significant percentage of total accommodated demand at a comparatively high Average Daily Rate. A rebound in group, convention and international-related demand will be required to insure a return to pre-Covid-19 levels of performance.

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About Kalibri Labs

Kalibri Labs evaluates and predicts revenue performance using its proprietary algorithms to generate the Optimal Business Mix for individual hotels, revealing the most promising opportunities to pursue along with specific direction on how to find and convert them. The HummingbirdPXM revenue strategy and benchmarking platform also includes the industry's most robust profiles for travel agent and OTA production. The Kalibri Labs database, updated weekly, is comprised of ADR, room revenue, room nights and acquisition costs from over 8 billion guest stays from almost 35,000 hotels dating back more than 5 years to give an expansive view of the U.S. hotel industry. Real estate developers, brokers, lenders, consultants, and others involved in hotel transactions use Kalibri Labs data to improve underwriting with a more granular view of benchmarks and trendlines for individual hotels, and almost 1000 markets and sub-markets for the U.S. These tools are enhanced with COVID-19 analysis to assist in modeling the future recovery curves.

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