By:  Serach Nissim

Times Square hotels are finally raking it in, after the hospitality industry’s devastation due to the pandemic.

As reported by Crain’s NY, tourism has returned to the Big Apple, and thanks to the city’s Airbnb crackdown and the housing shortage, the hotel business is bustling.  Host Hotels & Resorts reported last month that it would raise its quarterly dividend to shareholders by 20% compared to the prior 90-day period and by 50% compared to last year.

The company’s good news came mainly thanks to profits at the Marriott Marquis, the iconic 2,000-room hotel which it owns in Times Square.  Revenue per available room at the legendary Midtown hotel, as well as at the Marriott Downtown, jumped to $291 in the quarter ending June 30. This marked an impressive 11% increase over the year-earlier period, as per a regulatory filing.  The Maryland-based company’s NYC property gains were more than enough to offset wildfires which had shut down three of its hotels in Maui.

Over the summer, hotel prices rose even more, for many Big Apple hotels. Revenue per available room, or RevPAR, jumped by 16% at New York hotels, according to a report today from Evercore ISI. This marked the highest increase in the country, when only two other cities, namely Washington and Houston, saw double-digit increases.

“Recent alternative accommodations restrictions and city contracting of some existing hotel stock could be contributing,” said Evercore analyst Duane Pfennigwerth, subtly hinting to the city’s ban on Airbnb and the overloaded shelters stemming from the migrant crisis.

In September, roughly 20,000 listings were knocked off Airbnb, per analytics firm AirDNA, following restrictions in which the city began requiring hosts to register their homes.  Per Crain’s, most of those booted listings won’t be back on the platform soon because 57% of the nearly 1,700 applications reviewed by the city were rejected for deficiencies.

NYC has admitted some 95,000 migrants from the Southern borders so far in 2023, taking in twice as many migrants than cities in Texas, California and Florida. Per the Post, NYC is currently on the hook to house 60,400 migrants, with its 210 sites inundated, in addition to 17 large scale humanitarian centers opened.  The city has had to enter city contracts taking on hotel rooms to shelter additional migrants.

Per Crain’s, Vijay Dandapani, president of the Hotel Association of New York City, says the hotel prices are rising because inventory is down with more than 15,000 rooms, or roughly 13% of supply, being contracted out to the city, to house the asylum seekers. “That is the principal reason for  RevPar growth,” Dandapani said, adding that occupancy rates still remain below pre-pandemic levels. The four-week average for occupancy rates ending October 14 was at 87.3%, per CoStar data, still below 2019 when it had been at 91.4%.

“That’s a sure indicator that we are not anywhere near our principal international gateway competitors like London and Paris,” he said.  Dandapani added that the Airbnb rules took effect too recently to already be affecting hotel prices.  Another key hotel indicator that shows the industry is still lagging behind 2019 levels is hotel employment.  NY hotels currently employ 15% less workers than in 2019, or 8,100 fewer people, per Oxford Economics.

Still, we’ll take what we can get, and things are looking up for NYC hotels.  “The perception that there are fewer hotel options from these three issues will persuade visitors to pay more for hotel rooms and prompt hotel operators to raise prices,” said Barbara Denham, a senior economist at Oxford Economics