The well being of town’s resort trade is a crazy-quilt sample of principally optimistic however complicated and conflicting cross-currents. Massive new resorts proceed to open at the same time as well-known outdated ones shut for good. Occupancy’s means up over 2021 however nonetheless beneath pre-Covid occasions.
In the meantime, an uptick within the essential trade metric referred to as RevPAR, or income per accessible room, is welcome however not practically as a lot correctly, in accordance with Motels Affiliation of New York Metropolis (HANYC) chief govt officer Vijay Dandapani.
He argues that the most important impediment to full-scale restoration is the resort occupancy tax. The whopping 5.875% levy on each visitor deters many from coming right here, particularly occasion planners for giant teams — “In the event you’re planning an occasion to come back to Madison Sq. Backyard to see NCAA basketball, for instance,” Dandapani mentioned.
His group is lobbying town to slash the tax to 2.875% for at the least two years. In June of 2021, town underneath former mayor Invoice de Blasio dropped the tax solely for less than three months — “not sufficient to do a lot good,” Dandapani mentioned.
The inn trade was as soon as comparatively easy to trace, however pandemic disruption and simultaneous surges in new openings and closures made it as complicated to understand as a subway map is to first-time guests.
Take a look at the brand new Virgin, Ritz-Carlton and Arduous Rock, lovely additions in prime places! However avert your eyes from the darkish 4 Seasons on East 57th Avenue, hostage to an opaque dispute between proprietor Ty Warner and operator 4 Seasons.
Strive, too, to disregard the sorry spectacle of the Chinese language-owned Waldorf-Astoria, which, as we reported this week, won’t open earlier than 2025.
Of a dozen up-market Manhattan resorts that closed after Jan. 1, 2020, solely three have agency plans to reopen, in accordance with an evaluation ready for CBRE by Lodging Econometrics. They’re the uptown 4 Seasons, the previous Roger on Madison Avenue (to reopen in Might as AKA Nomad), and the Surrey on East 76th Avenue, rebranded as Surrey, a Corinthia Lodge (timing unknown).
The completely shuttered embrace the Bryant Park, AKA Wall Avenue, Marriott East Facet, the Roosevelt and the Hudson. The record doesn’t even embrace the Waldorf-Astoria, which went darkish in 2017, or embrace the large, lower-rent Pennsylvania, which is being demolished.
The town is hyping a big enhance in guests — a projected 61 million this 12 months in comparison with 56 million in 2022, and approaching the report 66 million in 2019. There’s even been a leap in guests from China, sometimes the most important spenders on luxurious items, eating places and leisure, because the nation’s borders reopened.
Occupancy in 2022 was 75%, nonetheless beneath the pre-COVID common of 86% however vastly greater than within the bleak days of 2020 and 2021.
However Dandapani mentioned the upbeat numbers are deceptive. General, he mentioned, the Massive Apple at the moment has about 118,000 open resort rooms, down from 126,000 pre-pandemic — regardless of the addition of 6,000 newly constructed rooms in the previous two years.
The theoretically “open” rooms embrace round 9,000 that are getting used to deal with migrants who ended up within the metropolis. They’re counted as “occupied.”
As for RevPAR, PwC’s Manhattan Lodging Index discovered that it elevated within the fourth quarter of 2022 year-over-year by 54%.
However Dandapani mentioned that New York RevPAR lags “cities which are main opponents to us.” In troubled Paris from which Dandapani simply returned, for instance, RevPAR rose 15% in 2022 over 2019 and in London by 7%. In New York Metropolis, RevPAR was nonetheless $4 much less on common in contrast with 2019” — a dip from $219 to $215, “and that was not adjusted for inflation,” he added.
Furthermore, he mentioned, the latest RevPAR upticks primarily benefitted the luxury-end of the market.
He attributed it to so-called “revenge” journey,” reflecting pent-up demand to journey by the rich who had been caught at dwelling throughout lockdowns and border restrictions. “It’s a proven fact that the wealthy obtained richer in the course of the pandemic,” Dandapani mentioned.