Bisnow: N.Y. Hotel Occupancy Soars 10% As Tourists Flock To The City

Bisnow: N.Y. Hotel Occupancy Soars 10% As Tourists Flock To The City

By MIRIAM HALL

September 1, 2023

While many hotels around the country experienced a weaker summer than expected, New York is reaping the benefits of scores of visitors.

Hotel occupancy hit 86% in July, a 10% jump compared to the year before, according to CoStar data, per Crain’s New York Business.

That continues a trend of the city outpacing the nation. Occupancy has gone up 13% year-to-date in New York compared to a national average of 9%, per the publication. July’s occupancy average, across the U.S., was at 69%. Meanwhile, the average daily rate in New York has outperformed 2019 levels each month since April of last year.

Jan Freitag, CoStar’s national director for hospitality market analytics, told Crain’s demand could gather more strength over the next few months.

“Traditionally, September and October are ‘meeting months’ when large corporate and association events come to the city and frequent the Javits Center,” he said. “Last September, market-wide occupancy was 86.3% with an [average daily rate] of $346. That was the strongest occupancy month of last year.”

Nationally, traveler demand hasn’t quite reached expected levels, with many vacationers eschewing stateside travel for trips to Europe and the Caribbean. As a result, CBRE lowered its 2023 projections for U.S. hotel performance last month.

Revenue per available room, or RevPAR, is expected to hit $96.64 this year, a 4.6% increase over 2022, though $1.25 less than what CBRE was forecasting in May.

New York is quickly making up lost ground since the pandemic and associated travel bans pummeled the hotel industry. And hotels have become a key part of the Adams administration’s response to the migrant crisis.

More than 140 hotels have a deal with the city, according to Bloomberg.

The city is paying $220M to the Roosevelt Hotel’s owner, the state-run Pakistan International Airlines Corp., to occupy more than 1,000 rooms. The Holiday Inn in the Financial District also formed a deal with the city, just weeks after it was put into bankruptcy. The agreement would see the administration renting 492 rooms to house about 15,000 migrants over the 15 months, paying $190 a room, compared to the $110 the hotel would typically charge.

Occupancy numbers have also been boosted by total room inventory in the city falling to 118,000, compared to 144,000 before the pandemic, the Hotel Association of New York City said at a Bisnow event in July.