Local Hotels Continue to Be Hit Hard

BOSTON-According to a new study put out by the Hospitality Research Group, the research affiliate of PKF Consulting, in conjunction with Torto Wheaton Research, this area’s hotel industry–which according to the study includes only the chain-affiliated hotel–will perform nearly two times as poorly as the average of the rest of the nation in terms of income received from the rental of rooms.

According to Petros Sivitanides, a senior economist at Torto Wheaton Research, “we expect Boston to do twice as worse” as the average of the rest of the nation. This area’s income received from the rental of guest rooms–referred to as RevPAR–decreased 10.4% in the second quarter of this year compared with the previous year’s second quarter. Nationally, the RevPAR decreased 5.1% in the second quarter of 2001 as compared with the previous year. Sivitanidas points out that most of the decline over the past year occurred in the full service segment, the higher quality hotels. The year’s decrease in that segment was 10.4% whereas the year’s decrease in RevPAR in the limited service, or lower quality hotel, segment was 1.9%. The nation’s saw a .2% decrease in RevPAR for the limited service segment, which, says Sivitanidas, means that that market essentially remained flat.

In both segments of the market occupancy rates were 8% lower this year than in the previous year with this year’s rates at the end of the second quarter at 73.5% versus last year’s 82.2%. Room rates in the full service segment of the industry here remained flat from the previous year–as they have across the country–notes Sivitanidas, but he emphasizes that he is anticipating that they will go down here.