PROVINCETOWN — For 10 years, Provincetown’s hotel and guest house industry has been characterized by two trends. The total number of hotel rooms has been gradually decreasing, as many properties, especially smaller ones, have been converted to private residences. Meanwhile, the industry’s total revenue has been steadily rising, up to $37 million per year just before the pandemic — according to the town’s rooms tax revenues.
The pandemic is the great turbo-charger of trends, however, and relief measures, low interest rates, and the rising stock market have put a lot of money into people’s pockets. The question facing Provincetown’s hotel industry now is which trend is going to be stronger: more properties removed from the market by wealthy buyers of single-family homes? Or more people willing to spend more money per night on hotels?
The answer could be both: fewer rooms, at higher prices, producing more total revenue.
A look at recent sales and listings shows that both trends are going strong. Residential buyers are snapping up smaller properties, but larger ones are still finding people — and, sometimes, corporations — willing to invest.
Before short-term rental sites like Airbnb.com and Homeway.com existed, there were many more guest houses and hotels in Provincetown. The list of business licenses in 2011 includes the names of many long-gone lodgings: the Valentine Guest House, the Rose Acre, the Black Pearl, the Gallery Inn. Some of them became single-family homes; some became condo complexes; a few even became staff housing for seasonal workers.
The town’s official room count hasn’t changed as much. It was 1,722 rooms (excluding campgrounds) in 2011, said Tourism Director Anthony Fuccillo, and dropped to 1,589 in 2012. It then stayed in the 1,500s for many years, before finally dropping to 1,495 in 2021.
The official count may not capture the full decrease in inventory, however. Many properties that are not actively renting rooms to tourists are nonetheless maintaining and renewing their lodging licenses. The Atlantic House, for instance, still has a license for 15 rooms. There are four licensed rooms at 116 Bradford St., which many years ago was the Burch House. The Victoria House is staff housing now, but it is still licensed for 10 hotel rooms.
“People may maintain the licenses, because they think there’s value down the line,” said Rob Tosner, former owner of the White Winds guest house and a broker who has been the listing agent for several guest house sales. “They’re thinking, we may not want to use it this way, but when we do go to sell it, we can say, ‘We’re licensed for X number of rooms.’ ”
“It’s certainly become more difficult over the years to make a residential property into a commercial one,” Tosner added. The complex process to create a new hotel makes the existing licenses worth holding onto.
Against this backdrop, it’s hard to say for sure if the pandemic has accelerated a loss of rooms. But residential conversions are definitely happening. Between October 2020 and March 2021, four smaller guest houses sold and were taken offline: the Bradford-Carver House, the Shire Max, the Secret Garden Inn, and the Bayberry Hotel. Christopher’s by the Bay just sold in September and is also permanently closed.
There are also at least two properties that are listed for sale and are currently under contract: the Beaconlight Guest House and the Somerset Inn. Details on the prospective buyers and their plans were not available at press time.
Throughout this period, though, there have also been properties selling to buyers who want to run hotels. Snug Cottage, the White Winds, and the Crew’s Quarters all sold in 2020 and are operating as guest houses. (The White Winds was renamed the Brasswood by its new owners.)
There’s also something of a new player afoot: the corporate buyer. “This is somewhat anecdotal,” said Tosner, “but there seem to be some bigger players in town who buy multiple properties and get some economies of scale.”
Linchris Hotel Corp. is the current owner of the Harbor Hotel and the Surfside Hotel in Provincetown. Lark Hotel Group bought the Inn at the Moors in 2017 and renamed it AWOL. The Lexvest Group has owned the Cape Colony Motel since 2012 and bought the Breakwater Motel in 2018.
The smallest of those corporate-owned properties has 26 rooms; the largest, Harbor Hotel, has 139. Corporate buyers haven’t yet stepped into the world of the 10-to-12-room guest house.
The Brasswood and the Bayberry
Brian Calhoon and his husband Tom Westmoreland bought their hotel, the Brasswood, from Tosner in early 2020 — coinciding with the March Covid shutdown. The next year, Calhoon’s parents, Stuart and Liz Calhoon, bought the Bayberry Hotel just up the street. The Brasswood is open and prospering; the Bayberry was taken offline, and the senior Calhoons, along with their son and son-in-law and their business partner Scott “Scooter” Differ, all live there.
“The Brasswood is licensed for 12 rooms,” said Brian Calhoon. They use the smallest one as an office, he explained, leaving 11 for guests. Meanwhile, the Bayberry was a six-bedroom guest house, with one room reserved for the owners. “The revenue from 11 rooms maths out a lot better than the revenue from five,” Calhoon said. “I think there’s a kind of balancing point, where there’s enough rooms to keep the property open.”
The physical layout of the buildings can also shape their viability as residences, Calhoon said. The Bayberry, for example, was built as three separate flats and, he said, was “awkward as a guest house. It had three kitchens!” It made sense to convert it back into a residence.
On the other hand, the White Winds, which became the Brasswood, was both huge and stuffed with bedrooms. “It’s just so much an inn, it wouldn’t make sense to make it a house,” Calhoon said.
Nearly all of Provincetown’s guest houses were originally built as residences. A determined renovator can do anything — but some properties are much easier to convert than others.
Tosner agreed that layout matters and added some other factors. “You’ll notice there are very few waterfront accommodations,” said Tosner. Those that do exist are almost all larger hotels. “You don’t find the guest house model there.”
Residential real estate prices are always a factor. To remain a business, a commercial property must out-earn what a potential home owner would pay for it.
That is why current prices and current property sales are significant. Market pressure is most clearly felt when a new mortgage is written, and room rates need to cover a much higher cost structure. Calhoon said that the pandemic year was tough, but the Brasswood hit the revenue it needed in 2021.
“We have come out in the black,” he said. “It’s not very deep black, but it’s black, and not red.” He does not think the era of inns is over in Provincetown.
“It’s funny — two musicians from Boston who worked in education,” said Calhoon, referring to himself and his husband. “It’s a weird pivot that I never would have guessed, but it’s worked out. We love making music, we love hosting people and creating community.
“It’s definitely a lifestyle, being always on — but I’ll clean toilets and carry laundry so that I can put on a concert that night or host a guest artist playing on the porch. Running an inn like this — it’s something I never would have predicted but absolutely love.”