August 4, 2011, Boston, MA - Pinnacle Advisory Group is projecting that Revenues per Available Room (RevPAR) will grow by 10.4 percent in the Boston/Cambridge Market and by 9.2 percent for the Suburban Boston market in 2012.  Key factors driving the improved performance are a strong convention year and a lack of new supply.  Moderate job growth and special events are also expected to have a positive effect.

Based on its year to date performance, the Boston/Cambridge market is expected to finish 2011 at an occupancy rate of 77 percent, just shy of its historic high of 78 percent.  Strong convention demand coupled with continued growth in corporate and leisure demand is projected to push occupancy to 78 percent in 2012. 

“The increased demand on top of already strong market occupancy will result in significant compression that will push demand out to the suburban market and help operators to increase room rates,” according to Rachel Roginsky, Principal of Pinnacle Advisory Group and head of its Boston Office.

Corporate travel planners are already bracing for significant growth in average rates for 2012 in the Boston/Cambridge market.  Hotel executives surveyed by Pinnacle Advisory Group indicated that they expected corporate negotiated rates to increase by between 6 and 10 percent.  Average rate growth in the group segment is expected to be lower as much of that business was negotiated during weaker market conditions.  Average rate growth in the leisure segment is expected to exceed 10 percent as operators capitalize on the anticipated strong demand.  In total, Pinnacle is projecting that the average daily rate for the Boston/Cambridge market will grow by 9.0 percent.     

The occupancy rate for the Suburban Boston market is forecasted to finish 2011 at 66 percent, up from 64 percent in 2010.  Compression from the Boston/Cambridge market coupled with increased corporate demand is expected to help the market grow to 68 percent in 2012.  The strong demand is expected to be accompanied by rate growth of 6.0 percent resulting in RevPAR growth of 9.2 percent.

About Pinnacle Advisory Group
Pinnacle Advisory Group (www.pinnacle-advisory.com) is a national, full-service, boutique consulting firm headquartered in Boston.  The firm was founded in 1991 and is composed of seasoned professionals – most with more than 20 years experience in the industry.  Pinnacle Advisory Group provides a range of services to the hospitality industry including market due diligence, appraisal, asset management, and litigation support.  The firm has offices in Boston, New York, and South Florida, however its work spans the globe.