BU School of Hospitality Hosts Boston and New England Lodging Year End Update: “50% is the New 80%”
FOR IMMEDIATE RELEASE
(December 9, 2020) Boston, MA – Arun Upneja, Dean of Boston University’s School of Hospitality recently hosted a dynamic presentation of thought leaders, to share a somewhat optimistic look at the New England landscape coming out of the pandemic.
Moderated brilliantly by Skift hospitality reporter Cameron Sperance, the panel conversation included Rachel Roginsky, ISHC, president of Pinnacle Advisory Group and adjunct faculty at the School; Josh Bowman, partner of Sherin and Lodgen and adjunct faculty; Jim Luchars, chief investment officer of Stonebridge Companies and also adjunct professor; and Joe O’Loughlin, vice president and team leader at Wells Fargo Bank. The conversation and trends updates were thus presented from the perspectives of a hospitality consultant, attorney, hotel owner, and banker/lender, respectively.
Some of the key observations from this distinguished panel?
- Rachel Roginsky notes that for 2021 in Boston, hotel owners and operators should appreciate that 50% is the new 80%; rather than 43%. Thus a 43% occupancy will be a strong normal, as compared to the 80% occupancy ranges that Boston and the surrounding communities positively experienced in pre-pandemic years. Additionally, she urged operators to push for occupancy rather than rate increases. Rate integrity should certainly be kept top of mind, but now the goal is to drive occupancy wherever and however it can be achieved. The staycation business naturally will help with the local leisure initiatives.
- Jim Luchars acknowledged the difficulties in operation businesses have had due to their revenue decreases, but expressed hope in recovery by noting the fact that some businesses saw surges this year – particularly in the summer and during weekends. The varying demand trends are noteworthy: some hotels near universities and health centers are experiencing greater demand.
- Josh Bowman appreciated the flexibility of the banks and lenders as well as the cooperation from brands. Lenders are exerting a fair amount of tolerance. As for rescue capital, there is a tremendous amount available. Additionally, the business generated from universities this year for housing, enabled hotels to better appreciate the relationships with these colleges. Bowman also predicts that some changes made to hotels and urban centers due to the emergence of COVID-19 might be permanent – safety standards, cleaning standards, even food and beverage. His clients are innovating new models and are introducing them to their hotels. Thus, there would be a continuing emphasis on making sure the guests feel safe and relaxed even after COVID-19 is no longer a concern.
- Joe O’Loughlin noted the strong industry response to the pandemic and credited owners and operators for adapting with innovation and speed. Key challenges over the next six months will continue to include expense management and liquidity. A near term government stimulus package will be critical for the industry. Lenders are beginning to consider new loans to “cycle tested” sponsors with high-quality hotels in recovering markets. There is limited capital available at all tiers of the capital stack. Proceeds are down and pricing is up. Select equity investors anticipating a recovery in the second half of 2021 are circling target markets for proven properties with capital issues and a strong history of pre-COVID cash flow.
To the extent that there is a silver lining, all participants agreed that 2021 will be better than 2020. There is no doubt that this winter will be challenging, but everyone was optimistic for the second half of 2021.
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About Boston University School of Hospitality Administration: Established in 1981, Boston University’s School of Hospitality Administration (SHA) offers students a combination of rigorous academics, liberal arts curriculum, and international experiences for the pursuit of success in lodging, restaurants, food service, and other avenues of the hospitality industry. SHA has a unique relationship with the city of Boston, where the area’s hotels and restaurants provide students with numerous opportunities for internships to satisfy work experience requirements for their degree. The next SHA Leadership Summit is open to students and industry executives and is scheduled for March 20-21, 2020. (www.bu.edu/hospitality)
About Boston University: Founded in 1839, Boston University is an internationally recognized institution of higher education and research. With more than 33,000 students, it is the fourth-largest independent university in the United States. BU consists of 17 schools and colleges, along with a number of multi-disciplinary centers and institutes integral to the University’s research and teaching mission. In 2012, BU joined the Association of American Universities (AAU), a consortium of 62 leading research universities in the United States and Canada.
MEDIA CONTACT
Leora Lanz, ISHC
Associate Professor of the Practice
Faculty Chair, Master of Management in Hospitality program
EMAIL: lhlanz@bu.edu
MOBILE: 516-680-8529