The lag between demand and supply appears to have been especially severe in New England over the past decade. Yet, parts of the region, notably Greater Boston, have ranked among the strongest travel markets nationally, with occupancy rates rising for the past six years, and prices for five. Hoteliers, developers, and others familiar with regional conditions cite several reasons that hotels take longer to come on line in New England. The real estate bust of the late 1980s caused construction financing to dry up until recently. Development costs are higher here.
Winter weather can slow construction.
And permitting can be lengthy and restrictive, especially compared with Sunbelt cities. University Park Hotel, in Cambridge, Massachusetts, has been under development for more than a decade. Built for business travelers and groups affiliated with MIT, developers had to address legal, financing, and community issues and will finally open this fall. Construction of hotels started to bloom in significant volume throughout the region by early 1997. And new motels have been sprouting along the major highways.