• New York Metropolis’s lodge market is main the nation’s post-COVID restoration, with an occupancy charge of 84% and a 12-month common each day charge (ADR) of $313.39 as of Q3 2024.
• Regulatory adjustments and financial components restrict the addition of recent lodge rooms, drive room charges greater, and create a positive surroundings for lodge house owners and operators.

New York Metropolis’s lodge market is presently among the many nation’s leaders in post-COVID restoration, in keeping with CoStar, with a 12-month occupancy of 84% and an ADR of $313.39. This locations New York at primary among the many High 25 lodge markets in america. The NYC Tourism and Conventions reported 62.2 million guests to the town in 2023, which is 93% of the 2019 whole, and expects that quantity to achieve 64.5 million guests in 2024 and 68 million guests in 2025.

A number of market-specific components are anticipated to restrict lodge provide whereas rising room charges. Notably, stricter laws on short-term leases, a newly applied zoning textual content modification and particular allowing course of, and each the non permanent and everlasting closure of tens of hundreds of lodge rooms. Nevertheless, labor negotiations and on line casino improvement might put stress on charges by way of greater working bills and elevated provide, respectively.

New York’s lodge market has seen some charge progress attributed to Native Legislation 18, a Quick-Time period Rental Registration Legislation. This legislation requires short-term rental hosts to register with the Mayor’s Workplace of Particular Enforcement (OSE). It prohibits reserving platforms like Airbnb, VRBO, and Reserving.com from processing transactions for unregistered leases. The legislation, which took impact in September 2023, has considerably diminished short-term rental listings, doubtless boosting lodge charges.

Moreover, New York lodge improvement is predicted to be constrained for the foreseeable future. Because the onset of COVID, the citywide lodge pipeline has decreased significantly by 49%, from 15,777 rooms below building halfway by way of 2020 to over 8,000 rooms below building as of October 2024.

New York Metropolis presently has roughly 43,650 completely or quickly closed lodge rooms. As of October 2024, over 16,000 lodge rooms citywide have been being quickly leased to accommodate refugees, immigrants, and the unhoused. STR-CoStar information signifies that Manhattan presently has roughly 6,326 rooms, or 4% of the entire provide, comprised of twenty-two resorts getting used as non permanent housing.

The current closure of lodge rooms and the ensuing enhance in vacant hospitality area have additionally led to conversion alternatives. Cushman and Wakefield have recognized roughly 7,370 completely or quickly closed rooms which have lately been or are anticipated to be, transformed to an alternate use similar to pupil housing, house rental, residential condominium, and/or workplace.

In August 2021, Governor Andrew Cuomo handed the Housing Our Neighbors with Dignity Act (HONDA), which gives a path for the State of New York to finance the acquisition and/or conversion of distressed resorts by nonprofit organizations to extend reasonably priced housing.

To boost public security and employee safety, on July 18, 2024, the New York Metropolis Council launched Int 991-2024 (Int. 991), an modification to the executive code of the town of New York, associated to licensing resorts. This invoice requires lodge operators to acquire a license to function a lodge within the Metropolis, schedule employees that present steady protection of their entrance desk, preserve the cleanliness of every visitor room, equip all core workers with panic buttons and supply core workers with human trafficking recognition coaching amongst different obligations.

Lastly, lodge on line casino improvement will impression provide over the following 5 to 10 years. In March 2024, the state Gaming Fee introduced a plan to situation three downstate gaming licenses in late 2025. Over ten proposals are being thought-about, with a minimal funding requirement of $500 million.

Each financial components and public coverage adjustments will considerably constrain the availability of lodge rooms in New York. General, the interaction of those components means that the lodge business in New York will expertise a interval of sturdy pricing energy, benefiting from the restricted availability of rooms and sustained demand. Whereas sure components, similar to rising working bills and the introduction of recent provide from casinos, might pose challenges.

Uncover extra at Cushman & Wakefield.