The hotel market on Long Island is expected to take a significant downturn in the next four years, becoming one of the worst in the country, according to a new study released by Ten-X Commercial, a real estate sales platform.
The company put Long Island in the top three of its list of “sell markets,” Long Island Business News reported. Local hotels had a 75 percent occupancy rate in the first quarter of 2019, up 73 percent from last year. Revenue per available room (RevPar), a key metric used to assess the hotel market, also rose 3 percent year-over-year, to $114.78.
Long Island’s average daily room rate of $150.69 during the first three months of 2019, however, represented a 1.3 percent dip from the first quarter of last year. Experts predict that downward trend to continue for the next few years.
“RevPar on Long Island is performing well right now, but room rates are at a peak and they don’t have much more to run,” Ten-X senior quantitative strategist Matthew Schreck told the outlet.
By the end of 2018, Long Island had 14,493 hotel rooms. That number is expected to grow to 14,663 by the end of 2019. Ten-X predicts that occupancy will drop to 70.6 percent this year, while average room rates on Long Island will fall to $143.83 and RevPar will tumble to $102.10 in 2010.
The Real Deal has recently noted new hotels planned as part of mixed-use developments proposed in Manhasset and Syosset, as well as another $28.2 million project in Smithtown. Joining Long Island in Ten-X’s ranking of top “sell” markets for hospitality investors — the firm analyzed the 52 largest metropolitan markets in the country — were Kansas City, Missouri, and Minneapolis. [LIBN] — Aidan Gardiner