New York City’s hotel industry continues to confuse with ‘misleading’ data
The health of the city’s hospitality industry is a maddening pattern of mostly optimistic, but confusing and conflicting cross-currents. Great new hotels keep opening while famous old ones close forever. Occupancy has risen sharply throughout 2021 but still below pre-Covid levels.
Meanwhile, an increase in the key industry metric known as RevPAR, or revenue per available room, is welcome but nowhere near as strong as it should be, according to Hotels Association of New York City (HANYC) chief executive officer Vijay Dandapani.
He argues that the biggest obstacle to full recovery is the hotel occupancy tax. The whopping 5.875% levy on each guest discourages many from coming here, especially event planners for large groups — “For example, if you’re planning an event to come to Madison Square Garden to watch NCAA basketball,” said Dandapani.
His organization is lobbying the city to lower the tax to 2.875% for at least two years. In June 2021, under former Mayor Bill de Blasio, the city dropped the tax entirely for just three months — “not enough to do much good,” Dandapani said.
The hospitality industry was once relatively easy to follow, but pandemic-related disruptions and the simultaneous proliferation of new openings and closings have made it as confusing to first-time visitors as a subway map.
Check out the new Virgin, Ritz-Carlton and Hard Rock, beautiful new additions in prime locations! But take your eyes off the dark Four Seasons on East 57th Street, which is hostage to a shadowy dispute between owner Ty Warner and operator Four Seasons.
Also, try to ignore the sad spectacle of the Chinese-owned Waldorf-Astoria, which we reported this week may not open until 2025.
Of a dozen upscale Manhattan hotels that closed after Jan. 1, 2020, only three have firm plans to reopen, according to analysis prepared for CBRE by Lodging Econometrics. They are the Uptown Four Seasons, the former Roger on Madison Avenue (reopening as AKA Nomad in May) and the Surrey on East 76th Street, renamed Surrey, a Corinthia Hotel (date unknown).
Permanently closed windows include Bryant Park, AKA Wall Street, the Marriott East Side, the Roosevelt, and the Hudson. The list doesn’t even include the Waldorf-Astoria, which went dark in 2017, or the huge, lower-rent Pennsylvania that’s about to be demolished.
The city is enjoying a significant increase in visitors – forecast 61 million this year compared to 56 million in 2022, and approaching a record 66 million in 2019. There has even been a surge in visitors from China, who are usually the largest Spending on luxury goods. Dining and entertainment since the country’s borders reopened.
Occupancy in 2022 was 75%, still below the pre-COVID average of 86%, but far more than the grim days of 2020 and 2021.
But Dandapani said the optimistic numbers were misleading. Overall, the Big Apple currently has about 118,000 open hotel rooms, up from 126,000 before the pandemic — despite the addition of 6,000 newly built rooms over the past two years.
The theoretically “open” spaces include about 9,000 used to house migrants who have landed in the city. They are counted as “occupied”.
As for RevPAR, PwC’s Manhattan Lodging Index found it up 54% year over year in the fourth quarter of 2022.
But Dandapani said New York’s RevPAR lags behind “cities that are our main competitors.” For example, in troubled Paris, from which Dandapani has just returned, RevPAR increased by 15% in 2022 compared to 2019 and in London by 7%. In New York City, RevPAR was still an average of $4 lower compared to 2019″ — down from $219 to $215, “and that wasn’t adjusted for inflation,” he added.
Additionally, he said, recent RevPAR increases have mostly benefited the luxury segment of the market.
He attributed this to so-called “revenge travel,” reflecting pent-up travel demand from the wealthy stuck at home during lockdowns and border restrictions. “It’s a fact that the rich got richer during the pandemic,” Dandapani said.
https://nypost.com/2023/03/26/new-york-citys-hotel-industry-remains-confusing-with-misleading-data/ New York City’s hotel industry continues to confuse with ‘misleading’ data