By: Ilana Siyance
Analysts had originally forecasted a dooms-day prediction of how long it would take for New York City’s hotel industry to bounce back following the COVID-19 pandemic. A new study says the recovery will be quicker than expected.
As reported by the NY Post, a recent study by CBRE is offering a more optimistic view of the hospitality industry. The commercial real estate services and investment firm has forecasted strong hotel performance this year and beyond. The estimate is based on the first-quarter results for 2022. The study estimates that the Average Daily Rate for hotel rooms will rise almost 30 percent, while annual occupancy jumps to 77 percent next year and to 82 percent by 2024. “The hotel sector has begun to rebound and is poised to return to pre-pandemic levels in both occupancy and ADR [average daily room rates] by 2024,” said Dan Hanrahan, senior vice president of CBRE Hotels Advisory for the northeast. CBRE also projected that revenue per available room (RevPAR), another key metric of hotel performance, will increase by 75 percent this year compared to last year.
Other studies predicting the outcome for the Big Apple’s hotel industry were far less rosy. In April, Crain’s had reported that hotel occupancy was at just 56 percent in February. The publication detailed a study, from the American Hotel & Lodging Association and Kalibri Labs, which had said that business-travel hotel and tourism revenue this year would be some 55 percent lower than in 2019.
The CBRE projection, is different, however, in that it utilized the first months of 2022, which are typically slow months —for the projection, rather than the year before. Also, the Hotel & Lodging Association study had categorized “tourism” to include other businesses besides for hotels.
Let’s hope the CBRE’s optimistic prediction will end up being more accurate than the alternates. The Big Apple has a handful of new oversized hotels which will add a whole load of new keys to the city’s available number of rooms to fill. There’s a new Hard Rock hotel which already opened on West 48th Street, adding 446 new hotel rooms. There is also the new the new Riu on West 47th, with more than 600 rooms.
The 29-floor hotel is situated in Times Square by the renowned “Restaurant Row” surrounded by Broadway’s famed theatres. Later this year, there is also a Ritz Carlton opening in Nomad. The hotel at 25 West 28th Street will offer 250 hotel rooms and suites, a Ritz-Carlton Club Lounge, Spa, restaurant and event space. Virgin Hotel is also opening its first NYC location– at the northwest corner of 29th Street and Broadway in the NoMad neighborhood. The over 40-story tower, developed by Lam Group, will offer 465 rooms, and is slated to be one of the biggest and tallest hotels south of Midtown, resting on 90,000-square-feet of commercial space.
