New York City hotel occupancy hit pandemic record, but new cases loom

The city led all markets in December’s first full week

(iStock/Illustration by Steven Dilakian for The Real Deal)
(iStock/Illustration by Steven Dilakian for The Real Deal)

New York City hotels marked a peak in occupancy in early December, but the industry’s rebound was reported under a resurgence in new virus cases.

The city’s hotel occupancy rate hit 81.5 percent in the week ending on Dec. 11, according to data from analytics firm STR reported by Crain’s. The figure marks the city’s highest since the onset of the pandemic.

The rate is still about 13 percent below the same week in 2019, but comes after CBRE Group previously forecast occupancy to hit a disappointing 56 percent in the fourth quarter.

“Everybody has been waiting to break out after two years of hibernating,” Lightstone president Mitchell Hochberg told Crain’s; his company operates three hotels under the Moxy brand, all boasting occupancy rates above 90 percent.

Holiday cheer in the hotel industry may not last long, however. In addition to flooding the city’s hospitality properties with visitors, December has also brought a familiar foe back to the forefront: coronavirus cases.

Dr. Jay Varma, Mayor Bill de Blasio’s senior public health advisor, tweeted on Dec. 16 to show city data detailing the daily positivity rate’s apparent doubling from 3.9 percent on Dec. 9 to 7.8 percent on Dec. 12.

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New York State set a record for its most positive cases in the entire pandemic for three straight days this weekend, capped by 22,478 positive tests on Sunday, an 8.41 percent positivity rate.

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The simultaneous spreads of the omicron and delta variants could complicate projects for the industry’s recovery. Still, not everyone is down in the dumps about the danger rising case counts can pose to the sector.

“We are cautiously optimistic that this will be a short blip on the road to New York’s long-term recovery” Jason Pomeranc, founder of Sixty and Civilian brand hotels, told Crain’s on the city’s ever-changing health policies.

The forecast for a full recovery in New York City’s hotel market remains cloudy. An April CBRE study predicted hotels in the city wouldn’t recover to 2019 occupancy levels until 2025.

[Crain’s] — Holden Walter-Warner

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