NYC hotels getting busier, but still struggling

Room nights sold rose 3.7% from the week before; Lady Liberty visits up

New York /
Jul.July 23, 2021 11:07 AM
Lexington Hotel at 511 Lexington Avenue (Google Maps)

Lexington Hotel at 511 Lexington Avenue (Google Maps)

The hotel industry is finally seeing some signs of life in New York City, with a 3.7 percent rise in rooms booked last week.

Hotels in the city sold 481,000 rooms last week, the most since the pandemic began. It was an increase of 17,000, or 3.7 percent, from the previous week, according to Bloomberg News.

Still, the publication noted around 100 hotels remain closed, CoStar has reported, and the market is in a depression. The occupancy rate in June was 63 percent for open hotels, but just 50 percent when accounting for closed ones. In the summers before the pandemic, it was closer to 90 percent.

Other signs suggest tourists are trickling back. In a press conference Thursday, Mayor Bill de Blasio said Statue of Liberty visits were up 22 percent from the last week of June, which he characterized as “skyrocketing.” He did not provide context by saying what the comparable increases were in past years.

Additionally, visits to the Museum of Modern Art doubled over two months and visits to the Metropolitan Museum of Art increased by 65 percent over the last 11 weeks. Still, attendance at both museums is lagging behind pre-pandemic levels.

Demand for hotels is likely to increase in the coming weeks before declining again after Labor Day. Some hotels have kept a percentage of rooms closed because they are short-staffed.

Nevertheless, investors have been betting on New York City hotels with a series of purchases in recent months, typically at significant discounts to their previous value. This week, Andrew Farkas purchased the Lexington Hotel for $185 million. The Midtown hotel had sold for $333.7 million a decade ago. It is set to reopen next month.

[Bloomberg News] — Holden Walter-Warner





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