New York Business Journal: High hotel occupancy in NYC sparks concern instead of celebration

New York Business Journal: High hotel occupancy in NYC sparks concern instead of celebration

By BEN MILLER 

June 2, 2023 

New York City’s soaring hotel occupancy rates, which are the highest in the nation due to recent special events and an influx of migrants and asylum seekers, have sparked apprehension instead of jubilation among industry experts.

According to hotel data firm STR, the city’s hotels have been operating at an 85.7% occupancy rate, claiming the top spot nationwide. That’s significantly higher than the nation’s hotel occupancy rate, which right now stands at 66.8%, according to STR.

One significant factor contributing to the upswing in occupancy is the temporary housing of migrants and asylum seekers. With more than 42,000 migrants residing in New York City, a substantial portion has been accommodated in hotels, funded through a contract with the Hotel Association of New York City Foundation, as reported by The New York Times.

While this arrangement has helped fill rooms, it has raised apprehensions among industry professionals who question the long-term viability and impact on the overall hospitality industry.

Vijay Dandapani, president and CEO of the Hotel Association of New York City, said the high occupancy rate is not a cause for celebration.

“No it is not. There is compression due to rooms being taken for the migrant business and [there are] still 10,000 closed rooms,” Dandapani said in an emailed statement.

In addition to migrant housing, special events have played a role in luring tourists and further boosting occupancy rates in recent weeks.

Notably, Taylor Swift‘s highly anticipated Eras Tour, held at MetLife Stadium in East Rutherford May 26–28, contributed to the heightened occupancy levels. The previous week saw a surge in occupancy (89.5%) as New York City hosted NYU’s commencement at Yankee Stadium.

For the week that ended May 13, New York City (83.7%) was the only major U.S. market to report occupancy above 80%. That level was up 3.9 percentage points year-over-year.

For the week that ended May 6, New York City (85.1%) and Oahu Island (80.2%) were the only two markets to report occupancy above 80%.