Business Travel Lifts Boston Hotels, Restaurants

It’s lunch hour at Legal Harborside in South Boston, and it’s bustling. Groups of businessmen tuck napkins over their neckties. Couples sit by the window. And Roger Berkowitz is smiling.

"Business is exceeding our expectations," says the CEO of Legal Seafoods, who opened this restaurant in April. "It sort of took off right away. So it surprised us with the speed in which it ramped up."

Berkowitz credits the concept of the three-story restaurant and revived interest in the waterfront. Still, the timing could not have been better. The doors opened just as Boston’s hospitality sector was turning around.

Restaurant sales jumped 13 percent in the first half of this year, compared to the year before, according to state tax receipts. And some of that is due to lunch customers such as Carey Hoch who are leaving the bag lunch at home and going out to eat more.

"I think it’s more just a mental respite to get away from your desk to just recharge your battery," Hoch says. "It’s not a luxury that you can do every day, but I think occasionally it’s good."

It’s not just restaurants seeing more consumers get less conservative. Hotels are, too. Andrea Foster of the Boston research firm PKF Consulting says leisure travel and tourism is up.

But the main reason may surprise you. "Business travel is certainly back," Foster says.

Remember all the cost-cutting that companies did during the downturn by laying off workers? Well, now corporate profits are up. And while firms are not hiring much, they are shelling out more per diem for business trips. Foster says that’s the main reason hotels have been able to raise their prices.

"Occupancy is up," she says, "and that’s when you can start getting a higher rate for the hotel rooms."

Revenues are up 10 percent over the past year in Boston. Though they haven't climbed as much further outside the city, where business travel plays a smaller role. And that relatively slower growth in consumer spending means Legal Seafoods' Berkowitz isn’t popping champagne corks just yet.

"We’re pretty fortunate in that regard," Berkowitz says, referring to Boston restaurant sales on the rebound. "But, you know, the economy really hasn’t taken off by any stretch."

Berkowitz and other restaurant and hotel owners won’t breathe easier until it does. But at least for now, the economy is being a little more… hospitable.