New York Post: Despite swath of luxe new openings, NYC’s hotel industry isn’t out of hot water, experts say

Other new hotels like the Ritz-Carlton Nomad add luster to the city.

Many other indicators seem superficially encouraging to hotel owners and management companies. More than 62 million people visited the city in 2023, nearly as many as in 2019. McKinsey & Co. forecasts that 2025 will see more tourists and business travelers than before the pandemic.

Investment-sale values have held up. Gencom recently paid a healthy $308 million for the Thompson Central Park on West 56th Street. The 610-room Park Lane Hotel was sold to the Qatar Investment Authority for $623 million, or about $1 million a room, in 2023.

Everyone looks forward to the reopening of Ty Warner's Four Seasons Hotel on East 57th Street next month after three dark years and- maybe - the reopening of the Waldorf-Astoria after eight years.

But appearances can be deceiving. Davis pointed out that the new projects all started before the City Council passed legislation in 2021 to require every planned new project to obtain a special permit subject to the Council's whims. Since then, the Hotel Association's Dandapani said, only five new proposals were submitted and only one approved.

"It's a two- to three-year process to get a permit, and then you have to factor in another two or three years to build," Davis noted.

Dandapani said the fact that occupancy is still 4% behind 2019, while revPAR is 20% lower, despite recent gains, is disappointing given that the city has between 13,000-19,000 fewer rooms than before at roughly 150 different properties.

That's due in part to Mayor Eric Adams' deals to house migrants - most visibly at Midtown's Roosevelt Hotel. The turnover to migrant use contributed heavily to a net 6,000-room loss since 2019 as new openings didn't fully offset the reductions, which included the 2020 closing of the 2,200-room Pennsylvania. Still, the city has at least 120,000 guest rooms, more than half of them in Manhattan.

Even the improvements in the price metrics show signs of slowing down. PWC said 2Q RevPAR, for example, increased 6.8% from the same period in 2023 - but the measures "while robust, continued to decelerate." The strongest improvement in RevPAR was in luxury properties.

Another cloud over the industry is the Council's proposal to create new licensing requirements - which Dandapani's organization first termed a "nuclear bomb" but supported after the original bill was modified (other industry groups still oppose the bill).

"We'll see what the final bill says," Davis said.

Whatever the future holds, it's a useful to remember that the city's room inventory was once much smaller than it is today. The city's guest room stock fell to just 72,000 in 2007. A construction boom gradually raised the total to historic highs. Nobody can predict what the future holds with nearly twice as many rooms in play. But if history's any guide, the market will eventually regain its equilibrium. The only question is when.

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