NYC hotels still slogging through slow months

Occupancy up from early January, but still below December levels

(iStock/Illustration by Kevin Rebong for The Real Deal)
(iStock/Illustration by Kevin Rebong for The Real Deal)

New York City’s hotel industry ticked back up in February after this winter’s slow season hit properties harder than usual.

During the week ending on Feb. 19, hotels averaged a 56.5 percent occupancy rate, according to STR data reported by Crain’s. Occupancy rates for hotels in the city improved from last month to reach the highest of the two-month-old year, but are still trailing levels typical before the pandemic and in the holiday season before the surge of the Omicron coronavirus variant.

February marked a significant step up from the previous month. As the Omicron variant’s spread sparked event cancellations and staff shortages across the country, the city’s occupancy rate dipped as low as 40.3 percent in early January.

Despite ticking up in the midst of a typically slow season, the industry is likely still reeling from how far occupancy has dropped from only two months ago. In the week ending Dec. 11, occupancy hit 81.5 percent, the highest since the onset of the pandemic.

NYC & Company, the city’s official travel agency, has lowered expectations for the year, according to Crain’s. It had predicted there would be 57.8 million visitors to the city this year, already almost 10 million below the 2019 numbers. It is now projecting 56.5 million visitors.

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Revenue per available room, another metric of hotels’ success, is also struggling to get back into gear. The revPAR was up $3 in the week ending Feb. 19, but still came in about $50 below the typical levels of pre-pandemic Februaries in 2019 and 2020.

The industry responded when occupancy dipped back down to 42.5 percent, with hotel owners launching a web and TV campaign to tug at the hearts and minds of elected officials.

As the rough numbers pile up, some are feeling dejected about the recovery of the hotel industry, including Hotel Association of New York president Vijay Dandapani.

“Before the Omicron variant delayed a comeback, conservative estimates projected a full recovery for the hotel industry in 2025,” Dandapani told Crain’s. “… Now it could be even longer. Make no mistake: Hotels are struggling.”

Not everyone is professing a dire view of the situation. John Beck, general manager of the Crowne Plaza HY36, told Crain’s he believes his hotel has something to look forward to, as 17 April days are fully booked and occupancy could exceed 90 percent for the month.

[Crain’s] — Holden Walter-Warner

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