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  • HFTP Research Report: Pre-opening Expenditures in Hospitality

    A study of the pre-opening budget; the timeline for these expenditures; timeline for onboarding of staff; and the selection, installation and training of the technology component. By Agnes DeFranco, Ed.

  • New Global Directors Join the 2018-2019 HFTP Board

    The HFTP 2018-2019 Global Board of Directors was installed during the association's 2018 Annual Convention and introduces new directors Toni Bau, Carson Booth, CHTP and Mark Fancourt. These extensive director profiles give insight into the distinguished professions and personal goals of HFTP's newest association leaders.

  • Internal Controls and the Important Roles They Play in Eradicating Fraud

    Although I have been preoccupied with getting in the education sessions purely related to hospitality finance, technologies and hotel pre-opening, I made sure to participate in Fun with Fraud and Enchanting Employee Embezzlement in Clubs and Hotels presented by Jerry Trieber, CPA, CHAE, CFE, CFF, CGMA, HFTP Global past president and director of audit services/support at HEI Hotels and Resorts.

  • Members Only: 2018 HFTP Compensation and Benefits Report

    By Tanya Venegas, MBA, MHM, CHIA. Results to the biannual survey conducted by Hospitality Financial and Technology Professionals (HFTP). Information includes data on compensation and benefits trends for finance and technology professionals in the club and lodging industries.

Ready, Set, Go! Boston Lodging Market Eagerly Awaits Another Marathon Weekend

Pinnacle Advisory Group ·12 April 2019
One of Boston's long-standing traditions, the Boston Marathon, will take place the third week of April this year drawing around 30,000 registered runners, both amateur and professional, and over 500,000 spectators made up of vendors, volunteers, staff, and media from all over the world. Hosted by the Boston Athletic Association (B.A.A.), it is the world's oldest annual marathon and takes place every Patriots Day, a State Holiday in Massachusetts. The Boston and Cambridge lodging market thrives during the weekend surrounding the Boston Marathon and this year, the 123rd annual, will be no different.Over time, the Boston Marathon has grown into a four-day event comprised of the John Hancock Sports & Fitness Expo (being held at the Hynes Convention Center this year), a 5k race and a one-mile invitational race, along with many other events held throughout the city for the world's top marathoners, elite athletes, fitness enthusiasts, and the general public. Additionally, the Boston Red Sox have an annual mid-day game every Patriots Day at Fenway Park, one block from the marathon route at Kenmore Square. These events have helped to lengthen the average stay, attract more visitors, and increase the overall economic impact throughout the region.In 2013, two homemade bombs were detonated near the finish line on Boylston Avenue killing three people and injuring hundreds more. Soon after, the "Boston Strong" rallying cry spread throughout the country, inspiring and supporting the City as it healed from the events. The following year, the B.A.A. increased its field size by 33% to 36,000 in order to accommodate the increase in demand largely driven by the support from the prior year's events.Lodging demand stemming from the marathon is typically a two to four-night stay, from Friday to Tuesday. While most of the lodging demand is accommodated in Boston and Cambridge during the long weekend, there is a considerable amount of demand in the suburban areas, travelers who are either price sensitive or those seeking accommodations with ease of access to the race's start line and area transportation.This brief analysis looks at the historic performance of the Boston & Cambridge lodging market over the three days surrounding the Boston Marathon; Saturday, Sunday and Monday nights. Over the last seven years, the market has had an average occupancy of 93% over the three-night period, ranging from 92 to 94%. Between 2012 and 2018, the ADR during these three nights has increased 4.0% on a compound annual basis with fairly significant increases from 2012 to 2014 with slow and steady growth the last four years. In 2018, the three-day weekend had a RevPAR of $319, approximately $100 above the market's annual performance.Although occupancy has remained between 92 and 94% the last seven years, demand has increased 2.0% on a compound annual basis during this period, increasing from approximately 60,400 occupied roomnights in 2012 to over 68,000 occupied rom nights in 2018. Following the tragic Boston Marathon bombing in 2013, people from near and far supported the City and those affected by the events. As a result, the Boston Marathon saw an increase in attendance, causing lodging demand to increase 1.6% over the three nights from the prior year and occupancy to reach a peak of 94.4%. Additionally, Easter Weekend overlapped with the Boston Marathon in 2014 (as with 2017) contributing to its increases in demand. With occupancies as high as they are through the weekend, the market is essentially at capacity. As such, much of the demand growth in recent years has been a result of new hotels opening in Boston allowing for those previously staying elsewhere to stay in the city.The Boston Marathon weekend is also one of the market's highest rated weekends of the year. The three-day average daily rate (ADR) has followed similar trends to the overall market since 2012. Increasing at above inflationary levels in 2012 and 2013 with considerable increases in 2014 as a result of its peak occupancies. Market ADR remained flat the following year as demand returned to previous levels. Since this time, ADR over the weekend has grown between 1% and 3% annually. This slower ADR growth in recent years is a result of new supply, both traditional hotel rooms and short-term rentals like AirBnB and HomeAway.Prior to last year's Boston Marathon, the Greater Boston Convention & Visitors Bureau projected its economic impact to the Greater Boston region to be $201 million. The Boston Marathon will continue to be a long-standing tradition for City of Boston and the surrounding area and it will always help to kick off the lodging market's peak season.

Boston & Cambridge Lodging Market Peaks in 2018 as Demand Outpaces Supply

Pinnacle Advisory Group · 5 February 2019
Despite the market's continued demand growth and capacity constraints through much of the year, average daily rate (ADR) increased only 1.6% to $262. Similar to the trends experienced nationally, the market's revenue per available room (RevPAR) has begun to decelerate, increasing 1.9%.Of the six submarkets analyzed by Pinnacle Advisory Group, the Cambridge set of hotels experienced the largest increase in RevPAR. The ADR in Cambridge increased 2.9%, due in part to many of its largest hotels undergoing renovations in 2017 and early 2018. These increases to rate, matched with a 0.5% increase to occupancy, resulted in a RevPAR increase of 3.6%, greatly outperforming the overall market. As the only submarket to experience a decline in occupancy, the hotels in the Fenway/Longwood Medical Area experienced the weakest RevPAR growth of 1.0%.Although the key economic indicators are leading to a healthy outlook for the U.S economy in 2019, the Boston & Cambridge lodging market has two factors which will negatively impact its performance; supply growth of over 5.5% and a weak convention calendar comparative to the prior year. As Pinnacle has reported previously, the market is expected to experience a decline in RevPAR in 2019.The Pinnacle Perspective reports the Boston & Cambridge lodging market's performance on a monthly and annual basis. Individual reports provide an indication of performance metrics by submarket, hotel size, and price point. Data is collected from over 95% of the market's rooms supply and aggregated to provide detailed market reports for its contributors.

Snapshot of the Washington DC Metropolitan Region's Lodging Market | By Anne Purcell

Pinnacle Advisory Group ·28 February 2017
2016 was a solid year for the Washington DC Metropolitan region's lodging market. According to Smith Travel Research (STR), the year-end 2016 RevPAR growth for the Washington DC MD VA region was up 4.9% over 2015, ranking it 9th of the 25 top markets it tracks. The region was 4th of 25 in terms of occupancy growth at 2.2%, but 18th of 25 in ADR growth at 2.7%. The predominance of demand tied to the Federal Government and the government lodging per diem continues to limit some of the region's pricing power. While more press is given to business and tourism demand in downtown Washington, DC, neighboring suburbs, particularly Arlington County in Virginia, and Montgomery County in Maryland, are also contributing to the region's solid growth statistics despite challenges in these suburban office markets.Arlington County, VA, located just across the Potomac River from Washington, DC, enjoys excellent access to Washington, DC tourist attractions and is also home to Ronald Reagan Washington National Airport. Arlington is still recovering from the 2005 Base Realignment and Closure Act which left the county with nearly four million SF of vacated office space from defense related agencies and 17,000 less jobs. Although office vacancy in the county continues to be high (22% as of 4th Quarter 2016 according to JLL) limited lodging supply growth has allowed Arlington hotels to maintain positive RevPAR growth. As of year-end 2016, RevPAR of Arlington hotels was up 2.5% over 2015 to $125.09. Occupancy reached a high of 77.2% in 2016; ADR has grown 7.7% since 2013. In the past six years only two new hotels have opened. The 183-room Residence Inn Arlington Ballston opened in May 2013, and the 168-room Hyatt Place Arlington Courthouse opened in August 2016. One hotel is currently under construction; a 168-room Homewood Suites is being developed by B.F. Saul at 1900 North Quinn Street, less than one mile from Key Bridge and downtown Rosslyn. In December 2016, the 318-room Hyatt Arlington was converted to Hyatt's Centric brand after an extensive renovation. Two notable hotels in Arlington sold in 2016; JBG sold the 338-room Westin Arlington Gateway in June 2016 for $97.3 million ($287,869/key) to a joint venture between Rockpoint Group and Highgate Holdings. HEI sold the 154-room Le Meridien Arlington to Carey Watermark Investors 2 for $51.8 million ($336,363/Key). HEI had purchased the hotel for $37.8 million in 2012. The economic outlook for the county received a significant boost in February 2017 when Nestle USA announced it would be relocating its U.S. headquarters from Glendale, CA to Arlington. Nestle will be leasing approximately 200,000 SF of office space at 1812 N. Moore Street and bring 750 jobs to the area beginning in 3rdQ 2017.Like Arlington County, Montgomery County, MD benefits from its proximity to Washington, DC in attracting both government and private companies to the area, as well as attracting leisure travelers looking for a lower priced alternative to downtown DC hotels. According to STR, as of year-end 2016 the RevPAR of Montgomery County hotels increased 4.7% over 2015 with increases in both occupancy and ADR, but no increase in supply. Hotels had an occupancy of 67.8%, up 1.5 points over 2015 and ADR of $129.14, up 2.4% over 2015. Federal Government and Federal Government agencies comprise much of Montgomery County's employment base. The top three employers in the county are all government agencies and include the National Institutes of Health, the Food & Drug Administration and Bethesda Naval Hospital. Together these agencies employ over 40,000 people. Montgomery County has also experienced high office vacancy rates. According to JLL, as of 4thQuarter 2016 the total office vacancy rate was 16.2% with just 75,000 SF under construction. Marriott International recently announced it would build a new 700,000 SF corporate headquarters in downtown Bethesda. The company currently leases 900,000 SF in the Bethesda/Rock Spring sub-market which already has the highest vacancy in the county at 28%. Like Arlington, very few hotels have opened in the past six years. The last hotel to open was the 140-room Cambria Inn & Suites in Rockville in 2015. There are two hotels currently under construction; the 177-room Canopy by Hilton at the Pike & Rose development on Old Georgetown Road in Rockville is scheduled to open in the fall of 2017 and a 100-room Home2 Suites on Elton Road in Silver Spring. Marriott is expected to build a 230-room hotel in conjunction with its new headquarters building in downtown Bethesda. Notable transactions in the market include The Meridian Group's purchase of the 390-room Hyatt Bethesda for $89.5 million ($229,487/key) in May 2015. The company completed a $37 million renovation of the property in December 2016. Pebblebrook Hotel Trust sold the 270-room Doubletree Bethesda for $50.1 million ($185,555/key) in November 2016.Limited supply growth is expected to continue to benefit both Arlington and Montgomery County lodging markets in the near term. However, the heavy reliance on Federal Government agencies for both its employment base and lodging demand present some risk given the uncertain direction the Trump Administration may be taking with regard to certain Federal agencies particularly those that are defense or healthcare related. Nevertheless, close proximity to Washington, DC is expected to continue to be very beneficial over the long term.


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