NYC is slated to get a massive influx of hotel rooms in 2018, raising concerns about a supply surplus
Hotels have been sprouting up in New York City like bamboo in recent years and, despite the softening overall market, that trend is showing no signs of slowing down.
There are more hotel rooms slated to come online in 2018 than any year since at least 2000. And developers have already delivered a massive 26,193 rooms in the city since 2013.
All of this comes as challenges from Airbnb, which has ushered in a new level of competition in the last few years, grow even fiercer. During Thanksgiving week, more than 41,000 people booked Airbnb rooms in the five boroughs.
But so far, there seems to be enough demand to go around. When 2017’s final stats are tallied, the number of tourists is expected to clock in at 61.8 million — a 2 percent jump from 2016 and the eighth straight record-breaking year.
In addition, hotel occupancy was up 1.3 percent, to 86.5 percent, through October 2017 compared to that same period in 2016, according to hospitality research firm STR.
“The demand continues to outpace the addition of new hotels,” said Sean Hennessey, CEO of consulting firm Lodging Advisors.
But, he said, “What we’re losing in the process is the pricing power that drives room rates higher.”
The number of new NYC hotel rooms slated to open in 2018, according to STR. That’s up from about 6,050 in 2017. In Manhattan, Steve Witkoff’s 457-room Marriott Edition and David Marx’s Courtyard Hotel on 34th Street at Hudson Yards are scheduled to open their doors this year. And, in 2019, the 505-room conversion of the famed TWA Terminal at JFK Airport is set to debut.
The dollar-volume drop of NYC hotel investment sales in the first half of 2017 — when the city saw $1 billion in deals — compared to the same time in 2016, which saw $1.54 billion. While that drop was sizable, it wasn’t as alarming as the 51 percent decrease in the multifamily sector or the 40 percent drop in office deals.
The number of hotels either built or planned in Long Island City since 2010 — the most of any outer-borough neighborhood. The runner-up neighborhood, Jamaica, had 26 projects. The largest planned LIC hotel is a 1,200-plus-room Toyoko Inn. It’s the first NYC project for the “no-frills” Japanese chain.
The average revenue per available room, aka RevPAR, in hotels citywide for 2017 through October. That was down from the roughly $222 average in 2016 and $226 in 2015, according to STR. Interestingly, limited-service hotels performed better than full-service, with RevPar jumping 0.3 percent for budget hotels compared to a 1.6 percent drop on the high end. Before 2015, overall RevPAR in NYC grew for three straight years.
How much cheaper NYC Airbnb rentals cost compared to hotels during two sample periods analyzed by Bloomberg. The analysis found that a typical hotel room went for $236, while an Airbnb went for $92. Year-over-year, hotel rates jumped 10.8 percent, while Airbnb rates dropped nearly 40 percent.
The square footage of the smallest rooms at hotelier Richard Born’s Pod 51 in Manhattan, which was NYC’s first major micro-room hotel when it opened in 2010. Born’s BD Hotel now has three Manhattan locations, one Brooklyn location and one Washington, D.C., outpost. Rooms in the NYC hotels range from $100 to $185.
The amount Airbnb spent lobbying law-makers in Albany — who’ve recently cracked down on short-term rentals — during 2017’s first half. That’s more than any other hospitality company statewide and twice as much as the second-place hospitality group spent. But it paled in comparison to Uber, which spent $1.8 million.
The nightly rate for the penthouse suite at the Mark Hotel, the most expensive room in NYC. The 12,000-square-foot, five-bedroom, Upper East Side abode takes up the hotel’s top two floors, has a private elevator and a dining room that seats 24 guests.