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Boston/Cambridge Hotel Occupancy Declines to 72.8% in 2009 from 76.9%
 in the Prior Year; Plans Afoot to Double the Size of the
 Boston Convention & Exhibition Center

By Donna Goodison, Boston HeraldMcClatchy-Tribune Regional News

December 29, 2009 --Boston and Cambridge hotels pulled out all the marketing stops this year, using major discounting to counter the ill effects of the economic recession and falloff in demand.

Revenue per available hotel room nevertheless plummeted along with rates and occupancy, even as the two cities managed to stay ahead of deeper downward trends nationally for the industry.

Meanwhile, the Massachusetts Convention Center Authority announced plans to double the size of the Boston Convention & Exhibition Center that's helped transform the city's visitor industry into a top 10 destination for meetings and conventions since its 2004 opening.

But even the center's bookings couldn't help Boston and Cambridge hotels sustain last year's results. Revenue per available room -- which factors demand and room rates -- is expected to drop by approximately 15 percent to $134.19 by year's end, according to Boston's Pinnacle Advisory Group. That compares to a nearly 20 percent in 2001 to $125.85 in the wake of the 9/11 terrorist attacks.

"It wasn't a pretty picture," said Paul Sacco, CEO of the Massachusetts Lodging Association. "The initial hit post-9/11 was very difficult, but this (recession) is lingering much longer. Everything fell on sales and marketing in 2009 to hold it together."

Hotel occupancy also fell despite Boston-hosted events, including the NCAA Men's Sweet 16 and Elite Eight hoop tourneys, the Volvo Ocean Race and Tall Ships, and the NCAA Men's Lacrosse Championships at Gillette Stadium. Occupancy declined to 72.8 percent from 76.9 percent, while the average daily room rate fell 12.7 percent to $189.20.

Other major hotel industry events this year included the openings of the 235-room W Boston and the 114-room Ames. The Hyatt hotel chain, meanwhile, has been the focus of protests and boycotts after it fired 98 Boston and Cambridge housekeepers in August and replaced them with cheaper outsourced workers.

The convention center expansion is the story to watch for the future.

The MCCA's plans announced last month call for not only doubling the 516,000-square-foot BCEC, but adding a 1,000-room hotel to the property that already includes the 793-room Westin Boston Waterfront hotel.

The goal is to make Boston a top five destination for meetings and conventions -- it's now ranked ninth -- according to the MCCA, which has formed a 25-member committee to study the proposed expansion and report its findings by the end of next December.

The 221 events hosted by the BCEC and Hynes Convention Center in 2009 generated a $445.6 million economic impact, including 525,000 hotel room stays, according to the MCCA.

dgoodison@bostonherald.com

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Copyright (c) 2009, Boston Herald

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