New York Business Journal: By a wide margin, New York City leads nation in new hotel room construction

By: Ben Miller

July 13, 2021

 

By a huge margin, New York City leads the nation when it comes to the construction of new hotel rooms.

 

According to hotel data information firm STR, New York has 21,878 hotel rooms under construction, which is three times more than the next U.S. city — Los Angeles — where 6,595 rooms are under construction.

 

According to STR, of those almost 22,000 rooms under construction, more than 8,500 are scheduled to open later this year. That would put New York City at more than 11,400 room openings overall in 2021.

 

“New York City is positioned for a post-Covid supply boom. The market has the largest number of in-construction projects along with the highest number of temporarily closed hotel rooms. As all this supply enters and re-enters the market, it’s definitely going to add pressure to recovering occupancy levels,” said Carter Wilson, STR’s senior vice president of consulting, in a Monday statement.

 

Vijay Dandapani, president and CEO of the Hotel Association of New York City, told the New York Business Journal in an emailed statement that the surge in hotel room construction “has no bearing on the direction of business at least in the short to medium term.”

 

“Hotel development … takes anywhere from two to four years and most if not all of these rooms were planned for well before the pandemic. In sum, New York City’s hotel supply far exceeds demand and will remain so for the next two to four years,” he said.

 

The boom in construction comes in the wake of Covid’s devastating effect on city hotels. According to the American Hotel & Lodging Association, New York City has seen one-third of its hotel rooms (42,030 rooms) wiped out by the Covid-19 pandemic, with nearly 200 hotels closing in the city.

 

New York’s hotel market remains in a “depression,” according to a report the Washington, D.C.-based trade group issued earlier this month, as New York is one of seven U.S. cities where Revenue Per Available Room has fallen more than 50% from May 2019 to May 2021.