Compared to the Struggles of the Overall U.S. Hotel Market NYC Stands Out as an Outlier

At a time when foreign visitors and domestic tourists are scaling back on travel plans which is impacting the hotel market nationwide, New York City has “hosted a near-record 64 million visitors. A total of 52 million domestic visitors and 12.1 million foreign visitors are expected in 2025 according to information provided in May by NYC Tourism + Conventions, the city’s official tourism organization. Attendance at shows along the Great White Way “is at its highest level since at least 2019” and visits to museums are also higher, while seven million people passed through Times Square — a volume that is 6% higher year-over-year. During the first half of 2025, city hotels averaged an occupancy rate of 82% a week — nearly 20 percentage points higher than the national rate according to reported data compiled by online real estate analytics firm Costar; and the $238.93 RevPAR (revenue per available room), which is a key performance indicator for the sector, is more than double the $99.94 national average. Some factors that have helped the city’s hotel industry include a 2023 law that imposed a limitation on the construction of new lodging properties, and increased city enforcement of restrictions on Airbnb and similar rental listings which significantly reduced the number of short-term rentals competing with hotel rooms. However there is some uncertainty as to how long New York City can remain an exception due to a 13% year-over-year decrease of Canadian tourists in June, based on airport traffic through customs;” economic uncertainty resulting in Americans taking shorter trips or cutting back on summer travel plans; and a 3% decline in European visitor volume has prompted NYC Tourism + Conventions to lower annual projections for international tourists to 12.1 million — two million fewer than it previous estimate. In addition, the revenue generated by the influx of a need for immigrant housing two years ago prompting the city to contract “more than 100 hotels” to help provide housing is a source that is no longer available; and the potential of hotel labor costs increasing as contract negotiations near with the Hotel and Gaming Trades Council, which represents nearly 40,000 hospitality staffers under a city agreement that expires after more than a decade in July 2026.

Source:    https://www.wsj.com/real-estate/commercial/nyc-hotel-industry-307fcf72