New York City's Hotel Market Is the Envy of the Country

Hindustan Times

15-07-2025

Hotel owners across the U.S. are reeling from a decline in foreign visitors and domestic tourists scaling back their plans. Then there is New York City.
Many of the city's major attractions are outdoing their performance of last year, when New York hosted a near-record 64 million visitors. This year, attendance at Broadway shows is at its highest level since at least 2019, and visits to museums like the Guggenheim on Fifth Avenue are also higher. More than seven million people passed through Times Square in June, up 6% from that month last year.
Business travel, which accounts for about one in every five hotel rooms sold in New York, is expected to be stronger than last year, according to the NYC Department of City Planning.
'In terms of overall demand, New York is holding up well nationally,' said Gabe Buerkle, senior analyst at real-estate investment firm Cohen & Steers. 'New York has remained an outperformer, benefiting from domestic tourism and business demand.'
Overall, the city's tourism organization said in May that it expects 52 million domestic visitors and about 12 million foreign visitors for 2025, roughly the same breakdown and total as last year.
New York hotel owners also enjoy certain structural advantages that have helped boost business. A 2023 law that limits the construction of new lodging properties has greatly limited new supply.
And the number of short-term rentals competing with hotel rooms has dwindled, after increased city enforcement of restrictions on Airbnb and similar rental listings.
New York City hotels averaged an occupancy rate of 82% a week for roughly the first half of the year. That is on par with last year—and nearly 20 percentage points higher than the national rate, according to real-estate analytics firm CoStar.
Revenue per available room, a key metric for the industry, at $238.93 was well above the national average figure of $99.94.
Hana Kováčová, an 18-year-old student from Slovakia, said New York City looked busier than when she came three years ago. She visited the M&M's store in Times Square and toured the Statue of Liberty. She took in the play 'Death Becomes Her' on Broadway.
'Walking through the city and seeing all the buildings has been my favorite thing to do,' she said.
Visitors from Australia and Brazil lounge around the pool this summer at the Gansevoort hotel in Manhattan's trendy Meatpacking district. Michael Achenbaum, president and founder of Gansevoort Hotel Group, said visitors to New York City arrive better informed today than in the past.
'They have done their research,' he said. 'They want a pastrami sandwich from a famous deli, a bagel and pizza.'
Hotel owners in much of the rest of the country haven't been as lucky. Many foreign travelers say they are struggling to secure visas under the Trump administration's new policies. Some have delayed booking trips during the late summer months, a critical time for foreign tourists—who spend four times more than domestic travelers—to stay longer.
The rooftop bar at the Gansevoort Meatpacking Hotel in New York City.
Canadian travel to the U.S. was down 13% year-over-year in June, based on airport traffic through customs. European visitors were down 3%, Buerkle said.
Americans, meanwhile, are taking shorter trips or cutting back on their summer travel plans because of economic uncertainty and rising prices, lodging analysts say.
Still, it isn't clear how long New York City can remain an exception, especially in terms of drawing foreign visitors. In May, the city's official tourism organization said it lowered annual projections for international tourists to 12.1 million, which was two million fewer than its previous estimate.
Both revenue per available room and the occupancy rate in New York City have fallen in recent weeks, according to CoStar.
Hotel labor expenses could also soon rise. The Hotel and Gaming Trades Council, the powerful union representing nearly 40,000 hospitality staffers, is gearing up for tough contract negotiations in the coming year. The union's industrywide city agreement expires in July 2026, after more than a decade.
New York City hotel wages are already among the highest in the nation, with housekeepers in the hotel union starting at nearly $40 an hour, according to Austin Shafran, a spokesman for the union.
A front-desk agent at the Bowery Hotel in New York earlier this month.
Hotels that had trouble filling rooms can no longer turn to the city and rent them out as migrant shelters. Two years ago, the city contracted more than 100 hotels to house migrants in around 12,000 rooms, or about 10% of all available rooms, according to the hotel association. The Row Hotel, with 1,200 rooms on the west side of Manhattan, is the only hotel still housing migrants.
But for many of the city's more upscale properties, business still looks good. Richard Born, one of the city's biggest hotel owners with 28 properties including the Bowery Hotel, says business is booming at his downtown Manhattan spots.
'Every month this year has been equal or better than the corresponding month of the prior year,' he said. And especially for more exclusive boutique hotels, he added, 'no one is anticipating a falloff.'
And many foreign travelers visiting New York are still booking extended trips. Marita Preder, a 68-year-old retired auditor from Germany, came to New York City for the first time in June with her husband on a 10-day trip. She strolled across the Brooklyn Bridge and watched the Michael Jackson musical 'MJ.' But she was particularly taken with the city's world-class museums.
'The Met has been our favorite so far,' she said.
Write to Redmond Bernhold at [e-mail]
New York City's Hotel Market Is the Envy of the Country