Randy Smith,
President,
Smith Travel Research

New York City ended 2000 as one of the strongest markets in the U.S., with an occupancy of 84.1%, three full percentage points higher than the second-strongest market, San Francisco. Room rates came in at approximately $220, a significant premium over any other major market. Revenues rose in the market in excess of 19% over 1999. Indeed, it was a banner year for the New York City market.

Unfortunately, the first quarter of 2001 has seen some of the sharpest declines in occupancy of any major market. In addition to the meetings market decline, New York has experienced some downturn in international visitation. People have been reluctant to travel to London (due to agricultural concerns), resulting in a decline in travel and tourism on the London/New York and Paris/New York routes.

Also, the stock market roller coaster has created concern in the financial communities. There have been cancellations of the traditional roadshows related to IPOs that have collapsed along with the IPO market. 

Smith Travel expects that difficulties will continue into the summer due to expensive gasoline prices, high airfares, and a general concern about the economy. However, as we progress into the fall of 2001, we anticipate that the situation will improve and that the Big Apple is likely to be one of the first beneficiaries of the upturn. 

We expect that 2002 will move back up to more traditional levels.

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Eleven new hotels, with a total of 1,622 rooms, will open in 2001. The opening of three boutique hotels in February of 2001 added to the first quarter occupancy woes. More than half of 2001�s new rooms will enter in the third quarter, including the 526-room W Times Square. The fourth quarter will see the opening of Ritz-Carlton�s 298-room Battery Park City hotel. By location, 58% of the new rooms will enter in Midtown West, 27% in downtown, and 15% in Midtown East. 

The boutique hotel segment continues to transform the Manhattan hotel market. The majority of recent development � 60% of new rooms in 2000 and 64% in 2001 � consists of boutique hotels. Even as the Hudson and the W�s challenge the boundaries of �boutique,� the Manhattan boutique segment is experiencing real demand growth. Boutique hotels are also crossing the boundaries of traditional luxury hotels, as $500-$600 standard room rates at the Mercer, Bryant Park, and the Chambers indicate.

Recent Changes to Hotel Supply in Manhattan

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Click on the links below for information on:

New York City Hotel Survey

HVS International

The Preston Robert Tisch Center for Hospitality, Tourism, and Travel Administration

New York University Annual International Hospitality Investment Conference

Acknowledgements

Manhattan Operating Statistics

New Supply

Recent Changes to Hotel Supply in Manhattan

Manhattan First-Quarter Operating History

Proposed Hotels in Manhattan

First-Quarter Operating Statistics by Market Segment

Manhattan Operating History and Forecast

Click on the links below to read quotes from the following individuals:

Rudolph W. Giuliani,
Mayor,
New York City

Jonathan M. Tisch,
Chairman & CEO,
Loews Hotels;
Chairman,
Travel Business Roundtable

Joseph E. Spinnato,
President,
Hotel Association of NYC, Inc.

Randy Smith,
President,
Smith Travel Research

Stephen Rushmore,
President and Founder, 
HVS International

Cristyne L. Nicholas,
President & CEO,
NYC & Company

Dr. Lalia Rach,
Associate Dean,
Preston Robert Tisch Center for Hospitality, Tourism, and Travel Administration,
New York University

To download a printable PDF version of this survey, click here.