Crain’s New York Business: Hotels hit highest occupancy of the year
By CARA EISENPRESS
February 23, 2022 5:46 PM
Last week the city’s hotels hosted the highest number of visitors since the start of the year, perhaps evidence that 2022 will shepherd in a tourism recovery.
January and February are typically the city’s slowest months for hotel stays, according to STR, which tracks the industry.
During the week that ended Feb. 19—before the long holiday weekend—occupancy averaged 56.5%, and it hit 69.7% for the weekend of Feb. 12, STR said. That full-week occupancy rate was up 40% from early January, when staff shortages and event cancellations amid a surge of Covid-19 cases pushed occupancy down to 40.3%.
Before worries about the omicron Covid-19 wave upset the fledgling recovery, city hotels had reached their post–March 2020 peak of 81.5% occupancy for the week that ended Dec. 11.
The city’s accommodation sector has been among the slowest industries to rebound, as cautious hospitality operators wait until demand steadies to rehire workers.
Employment at accommodation and food services companies was still 33% lower in December than it was in February 2020, according to a new analysis by economist James Parrott of the New School. That is triple the size of the 11% loss nationally, he wrote.
The dragging jobs recovery points to the reality that even this 2022 occupancy high point is a measured victory, according to Vijay Dandapani, Hotel Association of New York president and chief executive officer.
That is visible in a different metric Dandapani follows—revenue per available room, known as revPAR. For the week ending Feb. 19, revPAR was $105, up from $102 the previous week; in February of 2019 and 2020, it was nearly $150.
“Before the omicron variant delayed a comeback, conservative estimates projected a full recovery for the hotel industry in 2025,” said Dandapani, “and now it could be even longer. Make no mistake: Hotels are struggling.”
The slow start to the year caused NYC & Company, the city’s official travel agency, to revise its projection for the year downward. It had predicted in the fall that there would be 57.8 million visitors this year, down from 66.6 million in 2019. It now expects 56.5 million tourists this year.
In January of 2019 and 2020, by comparison, occupancy was 71% before jumping 5 or 6 percentage points in February. Last year the highest monthly occupancy for the year was 72.4%.
There is impressive demand looking forward, according to hotel general manager John Beck of the Crowne Plaza HY36. He said 17 days in April are already fully booked, and he projected that the hotel will be above 90% occupancy for that month, driven by group bookings for both leisure and business travel.
In November, Gov. Kathy Hochul allocated $250 million to tourism recovery, including marketing the city to potential visitors, supporting business-focused travel and granting $5,000 per additional employee to companies that brought back laid-off workers or hired others.