Hotels in New York City are slowly rising from the pandemic wreck, but their road to recovery looks longer and harder than in other metro areas.
Across the city, the occupancy rate for hotels that are open was 58.7 percent for the week ending May 29, according to lodging data provider STR. The rate was 87.2 percent in the comparable week in 2019.
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The slow pace of recovery poses a problem for over-leveraged hotels. About 38 percent of New York hotels with loans in commercial-mortgage backed securities were 30 days or more past due in May, according to Trepp. Across the nation, hotels’ delinquency rate was 14 percent, Bloomberg News reported.
Hotels elsewhere are doing much better. In Miami, revenue per available room was $323 on Saturday during the Memorial Day weekend, or more than 2.5 times compared to 2019. In New York hotels, it was $147, or 39 percent less than 2019.
New York’s slower recovery can be explained by the city’s reliance on business trips, Mark VanStekelenburg, executive vice president at CBRE Hotels Advisory, told Bloomberg.
“Supply is coming back online, but it’s still primarily leisure travelers that are using hotels,” he said. “It’s going to be a bit more of a difficult recovery for New York versus the rest of the U.S.”
CBRE predicts that the occupancy rates across the nation will return to pre-pandemic levels by 2023, but it could take two years longer in New York. [Bloomberg News] — Akiko Matsuda