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Edited by: TJVNews.com
Tourists planning to visit New York City are finding themselves grappling with an unwelcome surprise: skyrocketing hotel prices. As reported by The New York Times, accommodations in the city are reaching record highs, making a visit to the Big Apple a luxury that many can barely afford. For instance, a recent Friday night stay at a Hilton in Times Square cost $537, inclusive of a $35 daily “destination charge,” while a night at the Hotel Indigo in Lower Manhattan came to $414. Even the Aloft Hotel near LaGuardia Airport in Queens charged $351. These staggering prices reflect a broader trend as peak holiday tourism ramps up.
In September, the average nightly rate for a hotel room in New York City hit $417—the highest figure recorded by CoStar, a real estate analytics firm, since it began monitoring such data in 1987. According to The New York Times report, this places New York second only to Maui in hotel expenses during the same period. Rates for high-end Manhattan properties often soar above $1,000 per night. For example, a king room at the St. Regis New York in November costs $1,854 after taxes and fees.
The steep increase in prices comes as tourism in New York City experiences a dramatic revival. As indicated in The New York Times report, the industry—which was severely disrupted during the COVID-19 pandemic—has bounced back with nearly 65 million visitors expected this year. This resurgence is just shy of the city’s record-breaking 66.6 million visitors in 2019. New York City Tourism + Conventions anticipates this upward trend to continue, projecting over 68 million visitors by 2025. Despite soaring hotel rates, tourism officials have not observed significant signs of travelers being deterred, although some have opted for alternatives such as staying outside the city or with friends.
However, not all tourists are willing to pay the eye-watering prices. As highlighted by The New York Times in their report, travelers like Rahul Chhibber, who visited from London, were forced to get creative with their accommodations. Mr. Chhibber, who dreamed of soaking in Manhattan’s unique energy, was shocked by the high rates and eventually booked an Airbnb in Yonkers for $130 per night. This location, while outside the city, offered him access via commuter rail.
According to The New York Times report, travelers like Jon Lee, a 23-year-old undergraduate at the University of Colorado, are feeling the pinch. On a recent trip, Mr. Lee stayed with friends and family to save money, resorting to a Hyatt in Jersey City during a family vacation to cut costs. “I knew New York City was expensive,” Mr. Lee told The New York Times, “but I didn’t expect the most affordable options to be $600.”
The financial burden of staying in New York has similarly affected others. Elijah Krain, 24, and his girlfriend, who grew up near the city, planned a trip in August to attend the U.S. Open in Queens. They were shocked by exorbitant rates, even for “affordable” accommodations that jumped to $300 or $400 per night after fees. Speaking to The New York Times, Mr. Krain explained that they opted to stay at a family friend’s Manhattan apartment instead of booking a hotel.
Richard Born, a prominent hotel developer who manages 24 properties with 4,000 rooms in New York City, offered insights into the pricing dilemma. He told The New York Times that room rates have risen in line with inflation over the past two decades, but hotels charge a premium during high-demand seasons to sustain profitability. “New York City is not much more expensive than the other three or four premier markets in the United States and it’s still materially cheaper than Europe,” said Born, whose portfolio includes hotels like the Bowery and the Ludlow. “Were it not for the $400 rate in October, you could not survive.”
The return of tourists has intensified demand, causing hotel prices to soar. Data from CoStar, cited by The New York Times, reveals that nightly rates at mid-scale hotels have increased by more than 50 percent since fall 2020. In September, hotel occupancy reached 91 percent, matching pre-pandemic levels. This recovery comes despite the financial challenges tourists face.
Experts interviewed by The New York Times attributed the rising costs to broader hospitality trends and specific challenges unique to New York. The pandemic reduced the number of available hotel rooms, with struggling properties repurposed to house migrants. Over the summer, 11 percent of the city’s 136,000 hotel rooms were allocated for this purpose. Compounding the issue, New York City’s stringent new regulations have stymied hotel development and drastically restricted short-term rental listings on platforms like Airbnb. As noted in The New York Times report, more than 92 percent of Airbnb’s New York listings were removed to comply with rules limiting guests and requiring property owners to reside onsite.
“It’s the law of supply and demand,” Theo Yedinsky, Airbnb’s vice president of public policy, told The New York Times. He emphasized the need for New York City to remain accessible to a broad range of visitors. “New York can’t just be a place that the rich get to visit.”
For tourists, the lack of affordable lodging options paints a grim picture of New York’s hospitality landscape. As The New York Times report highlights, the intersection of rising demand, diminished supply, and tighter regulations has left budget-conscious travelers seeking alternatives—whether staying with friends, family, or in accommodations outside the city.
The debate over short-term rentals has led to proposed legislative changes. A recently introduced bill in the City Council seeks to ease some restrictions on platforms like Airbnb, potentially allowing travelers to stay in one- and two-family homes. According to report in The New York Times, this marks a significant shift from the city’s current stringent rules, which have removed over 92 percent of local Airbnb listings. The proposal reflects growing pressure to find a balance between affordable accommodations and the city’s need to regulate its hospitality sector.
Another key factor driving up hotel costs in New York City is the strength of its hotel workers’ union. The Hotel and Gaming Trades Council, which represents employees at most hotels in the city, wields considerable political influence and has negotiated what The New York Times calls the strongest labor contract in the U.S. for hotel workers. This agreement ensures hourly wages for front desk agents start at over $30, significantly higher than in other major markets. While this provides stability and a living wage for workers, it also contributes to the rising costs of running a hotel, which are inevitably passed on to tourists.
David Sherwyn, a professor at Cornell University’s School of Hotel Administration, highlighted another dimension of the cost surge. He explained to The New York Times that hotel companies are still recovering from the financial losses incurred during the pandemic, which brought the hospitality industry to a near standstill. “Hotel companies, like everyone else, are making up for lost time,” Sherwyn said. This financial rebound effort has added to the rising rates, compounding the challenges for cost-conscious travelers.
As The New York Times report noted, the convergence of these factors—regulatory changes, union-driven labor costs, and post-pandemic recovery efforts—has created a perfect storm for New York City’s hospitality market. While developers and established hotels may benefit from less competition, the ripple effects on tourism could be profound. If prices continue to rise unchecked, the city risks alienating a significant portion of its potential visitors, particularly those who rely on affordable accommodations.
