Festive occasion used to be on part of boat (7)
I believe the answer is:
wassail
'festive occasion' is the definition.
(term for festivities)
'used to be on part of boat' is the wordplay.
'used to be' becomes 'was' (I've seen this before).
'on' says to put letters next to each other.
'part of boat' becomes 'sail'.
'was'+'sail'='WASSAIL'
(Other definitions for wassail that I've seen before include "punch" , "Mulled wine" , "festive drink" , "One that may come in to bowl" , "Carouse" .)