HVS International : 2004 Manhattan Hotel Market Overview

Manhattan Hotel Market Overview

HVS International, in cooperation with New York University’s Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management, is pleased to present the seventh annual Manhattan Hotel Market Overview.

Findings of our 2003 Manhattan Hotel Market Overview reveal that despite a RevPAR decline of 1.4% for the year, composed of a 1.0% growth in occupancy and a 2.3% decline in average rate, 2003 ended on a very positive note for the Manhattan lodging market. While the first half of the year was severely impacted by the adverse effects on travel due to the war in Iraq and the outbreaks of the SARS epidemic, demand levels in Manhattan started rising in June, with overall occupancy increasing from four to six percent in each month through the end of the year. With demand compression increasing, average rate showed positive growth in October through December. Overall, RevPAR registered strong increases in the last four months of the year, rising at rates ranging from seven to nine percent in each month.

Based on the market’s strong fourth quarter results, an overall improved economic climate, and the expected year-over-year growth in the first four months of 2004, as a result of the market’s poor performance during that period in 2003, we forecast the Manhattan lodging market to achieve a robust 7.8% RevPAR growth in 2004. As the national economy continues to recover, we project that by 2006, Manhattan’s occupancy will reach close to 1999 levels and average rate will return to 2000 levels.

HVS International is a global consulting and services organization focused on the hotel, restaurant, timeshare, gaming, and leisure industries. Its clients rely on the firm’s specialized industry knowledge and expertise for advice and services geared to enhance economic returns and asset value. Through a network of 22 offices staffed by more than 200 seasoned industry professionals, HVS offers a wide scope of services that track the development/ownership process.

Starting with the market feasibility and appraisal study, a project is conceived and justified. Financing through the HVS investment banking team is then arranged, interiors designed, and management hired. The latest technology solutions are implemented, marketing strategies developed, and organizational assessments made. When a client requires actual, on-site hotel or restaurant management, HVS offers these services as well. Lastly, HVS asset management provides constant operational oversight that ensures the maximization of economic returns and asset value. No other organization offers such a broad range of complementary services. HVS also has specialists in parking operations, golf courses, and convention centers.

Since 1980, HVS International has performed more than 15,000 assignments throughout the world for virtually every major industry participant. Its principals literally “wrote the book” on hospitality consulting, authoring numerous authoritative texts and hundreds of articles. HVS is client driven, entrepreneurial, and dedicated to providing the best advice and services in a timely and cost efficient manner.

The Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management at New York University is a dynamic and growing educational and research center located in the heart of Manhattan. The Tisch Center offers an extensive complement of hospitality and tourism academic programs of study, including two bachelor’s degree programs and five master’s degree programs (three on-site and two online). In concert with its location in the financial and hotel capital of the world, coursework is focused on the areas of hospitality investments, hotel operations, revenue management, and customer relationship management relative to the international hospitality and tourism industry. As entrepreneurial educators, administrators and faculty are experienced in the profession and bring the reality of the industry into the classroom. The Tisch Center’s motto encapsulates its uniqueness — The City is our laboratory, the industry is our faculty, and our students are the future of the profession.

For 21 years, HVS International has played an integral role in New York University’s Annual International Hospitality Industry Investment Conference. Once again, our team of professionals looks forward to welcoming you to this prestigious event, which is scheduled for Sunday – Tuesday, June 6 - 8, 2004, at New York City’s Waldorf Astoria Hotel.

Randy Smith of Smith Travel Research has provided the Survey’s comprehensive hotel statistics of Manhattan. Smith Travel Research continues to be the leading source of hospitality industry operating statistics. We would also like to thank Joseph E. Spinnato and Rick Amatto of the Hotel Association of New York City for their assistance. Additionally, in cooperation with New York University, the data-gathering process was largely a contribution of two graduate students, Michael Parys and Nimeet Patel, through the coordination of Dr. Mark M. Warner, Director of Graduate Programs. HVS International is pleased to have been a part of this enriching educational process.