Outlook for hotels improves — from awful to merely bad

CBRE report says industry won’t feel like 2019 until 2025

New York /
Apr.April 30, 2021 11:00 AM
The Plaza Hotel, St. Regis Hotel, and Waldorf Astoria (iStock)

The Plaza Hotel, St. Regis Hotel, and Waldorf Astoria (iStock)

New York City hotels won’t be able to party like it’s 2019 until 2025.

Occupancy rates in the city won’t recover to pre-pandemic levels until halfway through the decade, according to a new CBRE study reported by the Commercial Observer.

The commercial brokerage firm expects revenue per available room to hit 2019 levels by 2024, with occupancy rates reaching 74 percent in 2022 and 86 percent in 2025.

CBRE’s report predicts an average occupancy of 43 percent for hotels through June, an increase from last year’s 35 percent.

The vaccination rollout and passage of $1.9 trillion of Covid relief will provide hotel owners with some reprieve in the meantime, according to CBRE senior hotel economist Bram Gallagher.

“New York City is now starting to experience an economic rebound,” said CBRE’s Mark VanStekelenburg. A full reopening of businesses is set for July 1 and this week Mayor Bill de Blasio announced a $30 million ad campaign to lure tourists back.

But predicting how many hotels will be built in the coming years is tricky. The New York Times this week reported that de Blasio’s own planning chief warned him that his plan to send all new hotel construction through a political gauntlet, would curb development, cost the city tax revenue and slow the return of tourism to the city.

The largest pandemic deal for a distressed hotel asset came early this month when Isaac Hera’s Yellowstone Real Estate Investments bought the 600-room Watson Hotel at 440 West 57th Street.

Hotel occupancy in the city hit its highest level — 47 percent — since last June during the week ending March 13. But that number does not take into account the many hotels that have closed — some permanently.

[CO] — Orion Jones





    Related Articles

    arrow_forward_ios
    President Joe Biden and New York State Senator Brian Kavanagh. (Getty, Department of Treasury)
    Federal guidelines could complicate state’s rent relief rollout
    Federal guidelines could complicate state’s rent relief rollout
    The reopening of NYC has created a surge of demand for apartments. (Getty)
    Reopening sparks signs of a real estate rush
    Reopening sparks signs of a real estate rush
    (iStock)
    Canada’s surging housing market may be peaking
    Canada’s surging housing market may be peaking
    (iStock)
    Job recovery sputters, but hospitality & leisure add hiring
    Job recovery sputters, but hospitality & leisure add hiring
    Ron Burkle and Andrew Zobler with The NoMad New York. (Google Maps, Getty)
    NoMad Hotel heads back to the auction block
    NoMad Hotel heads back to the auction block
    Illustration of Amazon's Jeff Bezos (Photo illustration by Kevin Rebong for The Real Deal)
    No room in the warehouse: Amazon fuels shortage
    No room in the warehouse: Amazon fuels shortage
    Jeff Sutton and 25 West 34th St. (Wharton Properties, Google Maps)
    Jeff Sutton will replace Midtown retail space with hotel
    Jeff Sutton will replace Midtown retail space with hotel
    Sen. Brian Kavanagh (Getty, iStock)
    New York votes to extend eviction ban through August
    New York votes to extend eviction ban through August
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...