Worcester Business Journal

12 Worcester Business Journal | March 18, 2019 | wbjournal.com Hotels on the rise T he Greater Worcester hotel industry has seen steady in- creases in occupancy rates and prices, all while more rooms come on the market. Now, the question is whether that growth can continue – or run into what one prominent hotel industry group predicts is a widespread slowdown, including a projected plateau this year in occupancy rates. "Room demand growth is connected to GDP growth at the hip," said Jan Freitag, an analyst with the Tennessee industry analyst STR, referencing a leading economic indicator. e forecasted stall in the nation's hotel industry would come as Worces- ter metropolitan area hotels mark five years of growth in occupancy rates and average nightly room rates. e region's occupancy rate rose from 62 percent in 2013 to 66 percent in 2018, according to STR. At the same time, the typical room rate has risen from $103.10 to $115.92 in 2019. A rise in the number of Worces- ter-area rooms – along with a bigger demand for those rooms – has helped the economy across Central Massachu- setts, according to those in travel and tourism. ey attribute the demand to the geographically central location and an affordability not possible in Boston. "If you're the Massachusetts associa- tion of anything, this is in the center of everything," said Alexandra McNitt, the executive director of the Chamber of Central Mass South in Sturbridge. "It's BY GRANT WELKER Worcester Business Journal News Editor M E E T I N G S G U I D E & G O L F D I R E C T O R Y F OC U S Greater Worcester has added hotel rooms and increased occupancy rates faster than national averages, while prices continue to climb half the price of Boston to stay here." Rising occupancy rates and room prices in Greater Worcester come as the region has added new rooms. A 118-room Homewood Suites opened on Washington Square in Worcester in 2017, and a 170-room AC Hotel opened on Front Street in April. In Sturbridge, the Publick House Historic Inn expanded by 28 rooms last year. Plans further growth A 109-room Homewood Suites is set to open April 18 in Berlin. In Worcester, plans for a $240-million redevelopment in the Canal District surrounding a planned ballpark for the Pawtucket Red Sox call for two new hotels. A 150-room hotel and a 100- to 110- room hotel overlooking the ballpark are part of a mixed-use development slated to include 225 residential units, 65,000 square feet of retail space, and 200,000 square feet of residential or office space. e Worcester metro area, which STR measures, does not include Middlesex County, which means Marlborough, with 11 hotels and nearly 1,900 hotel rooms, isn't counted in the regional to- tal. But Marlborough has seen a notable increase in rooms, too. e Apex Center of New England development on Route 20 opened in 2017 with a 108-room Fairfield Inn & Suites and a 137-room Hyatt Place. at came just a year aer a 160-room Hilton Garden Inn opened in the city. "With the opening of the Apex Center of New England, the expansion of the New England Sports Center, and the continuing flow of new businesses into Marlborough, the city has definitely seen an increase in hotel-room demand," said Meredith Harris, executive director of the Marlborough Economic Develop- ment Corp. "While more people are visiting and getting to know our city, they are also eating at our local restaurants, shopping at our retail stores and enjoying all Marl- borough has to offer," Harris said. A critical piece of the economy Even as the number of hotel rooms in and around Worcester has grown, it's still sometimes not enough, said Sandy The Worcester metropolitan market has added more hotel rooms with a greater occupancy rate than the national average over the last five years. Greater Worcester hotels % change National Hotels 2014 2015 2016 2017 2018 from 2014 % change Note: All numbers are the average for the respective year. Source: STR Number of rooms 129,680 129,806 133,438 137,818 144,918 11.8% 6.2% Average price per room $104.25 $107.75 $113.55 $114.20 $114.87 10.2% 12.2% Occupancy rate 61.0% 64.0% 62.9% 65.0% 65.6% 7.5% 3.0% The Homewood Suites in Berlin is under construction and slated to open on April 18. PHOTO/GRANT WELKER PHOTOS/MARLBOROUGH ECONOMIC DEVE:OPMENT COPRP. Hyatt Place, along with Fairfield Inn & Suites, opened in the Apex Center in Marlborough two years ago. Fairfield Inn & Suites opened in Marlborough in 2017.

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