NYC jobs are back — but not for the hotel business

New York City reached a crucial economic milestone last week when it exceeded the total number of jobs New Yorkers had pre-pandemic.

Indeed, our mayor and governor deserve much praise and credit for their efforts to bring us back.

But the overall higher number masks challenges, and opportunities, for our economy.

In particular, one major sector we’ve relied on for good-paying, middle-income jobs for people of color and immigrants is still far from recovering post-COVID: hospitality.

We’re still about 20,000 jobs below 2019, even as tourism has ticked back up.

Why? Some factors are out of our control — like a strong dollar making it more expensive for international visitors to travel here and China’s economic problems.

But high taxes and lack of government support in New York also artificially inflate the cost of hotel stays, making it impossible to compete with other major cities for guests, depressing the sector’s recovery and leaving New Yorkers unemployed.

And a misleading economic number has led to a lack of urgency to help the hospitality sector: The official city hotel occupancy rate — the percentage of rooms occupied in any given night — is now within just six percentage points of where it was pre-pandemic, which sounds pretty good.

But the number of available hotel rooms is down by nearly 10,000 due to COVID bankruptcies, high taxes and migrants in shelter.

So the actual number of hotel guests is far lower than it was.

Comparatively, Amadeus Demand360, the industry’s international hospitality market intelligence platform, reports that major European cities and Asian cities, such as Tokyo, Seoul and Singapore, now have hotel occupancy levels above where they were in 2019.

In fact, Paris and London — our main competitors — far exceed 2019 levels, soaring 79% and 35% respectively.

Meanwhile, in New York, the hotel industry employed more than 50,000 New Yorkers and raised $3.2 billion a year in city tax revenue in 2019, adding $22 billion annually to our economy.

Now all of those numbers are much lower.


The result has been devastating for New Yorkers and working families, including Merima Sajtovic’s, one of the authors of this column.

An industry relied on historically for good-paying jobs with benefits and advancement opportunities for working-class New Yorkers now teeters on the brink as hotel after hotel goes bankrupt or is sold, permanently eliminating jobs and making it impossible for the city to capitalize on any upswing in tourism.

So what are we going to do about it?

In short, we have to make it less expensive for visitors to stay in our hotels and less expensive for hotels to stay open.

Fortunately, the city has tools at its disposal that can achieve both.


First, the city must lower its hotel occupancy tax, which has crept up year after year as an easy way for the city to generate revenue but now adds a whopping 5.875% to each room bill.

According to an analysis by a leading economist for the Hotel Association of New York City, lowering that rate by three percentage points would increase hotel stays by about 45,000 room nights a month.

That is because people want to visit New York, but New York is simply too expensive.

Recent metrics reported by another industry tracker, Future Partners, show that our city is one of the most-desired travel destinations of American tourists but viewed as dead-last in affordability among the nation’s largest 26 cities.

Second, New York hotels shoulder twice the property tax burden as in other major markets.

In 2019, 9.4% of New York hotels’ revenue went toward property taxes.

During the pandemic, that share increased to nearly a third, leading to a higher number of foreclosures and bankruptcies here, as well as crushing debt that still threatens the viability of dozens of hotels.

Many hotels will simply stay closed until taxes are lower and they can operate at a profit.

Many more will eventually drift into bankruptcy unless action is taken.

Every dollar we spend reducing those tax rates is an investment in bringing hospitality stats back up, which will quickly yield higher tax revenues through increased overall room occupancy and reopened hotels.


As the city searches for solutions to its persistent economic challenges, the migrant crisis and municipal budget woes, investing in hotels by relieving them of their massive tax burden will ignite an industry-wide explosion in tourism while providing good jobs for longtime New Yorkers and newcomers alike.

We can solve many problems with one solution — and hotels are the key. The city just needs to unlock their potential.

Vijay Dandapani is the president and CEO of Hotel Association of New York City. Merima Sajtovic is a front-desk agent at the Fitzpatrick Manhattan hotel.