The lodging market in Boston and Cambridge was steamrolled by the pandemic, with the area’s occupancy rate plunging to less than 26 percent last year, driving revenue per available room — the performance measure used in the hospitality industry — down more than 80 percent, according to the hotel consultancy Pinnacle Advisory Group. The region fared only slightly better than New York, which had the biggest drop in the country.
This year, local hotels are projected to hit 42percent occupancy, half of what it was in 2019. And hotel revenues aren’t expected to get back to pre-pandemic levels until 2025.
An estimated 8,000 hotel employees are still out of work around Boston, and some jobs may not return for years, if ever.
The Parker House, where Charles Dickens first recited “A Christmas Carol” in the United States and Senator John F. Kennedy proposed to his future wife, shut down at the end of March last year and didn’t reopen until just after Labor Day, dropping down to four nights a week through the winter. The hotel fully reopened on Wednesday, but still has no food or beverage service. Bookings have been flickering back to life, but international guests, who typically make up about a fifth of the hotel’s business, are nonexistent; corporate travel, which accounts for roughly half, has also dried up.
Neither are expected to bounce back anytime soon, and general manager John Murtha isn’t sure when he’ll get back to the full staff of 350 he employed before the pandemic.
“Given the trajectory of the business that we see now,” he said, “I think it will take us two-and-a-half to three years to get back to that level.”
Leisure and hospitality is expected to be the last sector to rebound in most cities, but the road back is expected to be particularly bumpy in Boston. The state’s tight restrictions on travel and gathering size are only just starting to ease, putting a damper on advance bookings, and people are likely to remain leery of visiting heavily populated urban environments until vaccinations are more widespread.
The area’s heavy reliance on business and international travelers — including college students and their families — will also hinder recovery. Business travel previously accounted for about 40 percent of the trips through Logan Airport, according to the Massachusetts Port Authority, a figure that dropped considerably last year.International travelers, which made up 18 percent of visitor spending in Boston in 2019, fell by 78 percent last year; the biggest spenders among them, visitors from China, vanished when the airport’s three nonstop flights to Hong Kong and the rest of China were halted. Those flights have yet to resume, along with 15 other international routes including Rome, Tel Aviv, Toronto, Munich, Zurich, and Madrid.
Overall, Massachusetts is experiencing one of the biggest reductions in air travel in the country, with 53 percent fewer flights scheduled next month, compared to April 2019, according to Airlines for America. Nationwide, the drop is 32 percent.
“The devastation in Boston was significantly more severe than it was in the rest of the country,” said Adam Kamins, a director of economic research at Moody’s Analytics.
More than a dozen properties in Boston and Cambridge remain closed, including the 1,200-room Sheraton Boston Hotel, the biggest property in the city, located next to the largely dormant Hynes Convention Center. And those that are open are getting a fraction of the business they usually do.
At XV Beacon, a 63-room hotel on Beacon Hill, occupancy is around 20 percent, less than a third what it normally is this time of year. About 34 of 56 staffers have returned, but the majority are working part time. General manager Amy Finsilver is encouraged that colleges are holding in-person graduations and said May bookings are “very strong.” But strong in 2021 is much different than strong in 2019. “I’d be happy if we’re 50 percent for May this year,” she said.
It’s disheartening that hotel workers weren’t prioritized to get vaccinated, she said, given their proximity to guests. It could have been a big selling point, on top of sealing off rooms for 24 hours between guests and purifying the air with ultraviolet germicidal irradiation. Even when the virus is no longer an issue, Finsilver worries about the rising acceptance of virtual meetings, considering that, typically, half the hotel’s guests were in town for business. “It’s a bleak outlook, but we’ll persevere,” she said.
Spring is bringing some hope. Mohamed Aitbraym, a doorman at the Battery Wharf Hotel on the waterfront, is starting back to work part time on Wednesday, his first day on the job in more than a year. He’s getting only two shifts a week, and his colleagues in the food and beverage department are still furloughed, but it’s a good step.
“It’s better than nothing,” said Aitbraym, 39, who is originally from Morocco and lives in East Boston with his wife and two young daughters. “When everybody gets the vaccine, everything’s going to be OK.”
But judging by what’s happening around the city, it may not be.
At least six Boston-area hotels have terminated large swaths of their staffs, resulting in more than 800 permanent layoffs, according to the hospitality workers union, Unite Here Local 26. Other hotels may operate with fewer employees even after the pandemic recedes, which could have a profound impact on the largely immigrant workforce.
At the Wyndham Boston Beacon Hill, general manager Tom Chmura is encouraged by “pops and blips” of weekend bookings he’s starting to see as summer approaches: a “little silver lining in the dark cloud.”
The Wyndham has been helped by its proximity to Massachusetts General Hospital and the 100 rooms occupied by Suffolk University students, but the hotel’s food and beverage operation remains closed, more than half of its 105 employees are still furloughed, and room rates are low. Things have been so grim that Chmura admits to getting excited when he sees a day with just five more rooms booked than the week before. “Those are literally the straws we’re clutching at now,” he said.
Even with finance and tech companies on solid footing, and health care and retail expected to regain jobs by the end of the year, the hospitality market could be a drag on the region’s recovery, said Kamins, of Moody’s Analytics. If hotels are struggling, that means the laundry and food services that depend on them are, too, along with nearby restaurants and shops. This could lead to businesses closing, making the city less attractive to visitors and residents alike. “You just get into this vicious cycle,” Kamins said.
Despite the grim forecast, Martha Sheridan, president of the Greater Boston Convention & Visitors Bureau, is confident that Boston will return to the “top of the heap” as a tourist destination. Domestic leisure travel is showing signs of life, and Sheridan has been encouraged by the 80 or so competing hotel executives coming together on twice-monthly calls to find a path forward.
“We’ll get there,” she said. “The only way we’re going to get out of this is the rising tide floating all boats.”
Jon Chesto of the Globe staff contributed to this report.