Tourism Is Up: So Why Is New York City’s Hotel Room Revenue Slumping?
Photo Credit: A street view of Times Square in New York City, a prominent tourist attraction for travelers. Flickr / Jörg Schubert
Skift Take
With so many hotel rooms in the pipeline, a turnaround of slower revenue-per-room growth in New York City is not expected until after 2020. It's a classic supply-and-demand problem, making it a delicate balance to get pricing power back in a city where tourism remains hot.
Operating a hotel in New York City has never been more expensive, thanks to higher labor costs, ballooning property taxes, and hotels’ growing reliance on online travel agencies to boost occupancy.
Cloudy revenue-per-available-room (RevPAR) forecasts, in the face of what promises to be an economic recession in the U.S., also have hotel operators and developers wary of when the city’s hospitality market will rebound from what has been a turbulent year for the industry.
New York City may have bucked recent RevPAR trends in 2018, outpacing the overall U.S. hotel market in the important industry metric (3.5 percent growth compared to 2.9 percent for the U.S.) but this year has been more of the status quo.
New York City room revenues through the first half of 2019 fell 3.8 percent and is projected to finish down around 2.1 percent for the year, the worst output by the hotel sector since 2015, according to recent data provided by industry research firm STR. RevPAR for all U.S. h
