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Manhattan Operating History & Forecast
Mark Lomanno
President
Smith Travel
Research
The New York City hotel market has enjoyed a stellar 2004 and all
signs point to another excellent performance in 2005. RevPAR in 2004
was $150.43, up an incredible 19.3% over 2003. The tremendous growth
was fueled by an increase in rate of 10.6% and an increase in occupancy
of 7.9%. We recorded the rate for the full year 2004 at $185.76, which,
despite being the highest in the Top 25 largest lodging markets, was
still $20.00 below the peak of the year 2000 when citywide ADR reached
$205.04.
In 2004, New York City hoteliers sold more rooms than ever before,
some 23.6 million, generating $4.3 billion in rooms revenue. It is
worth noting that although the number of rooms sold was only 2.3%
of the one billion rooms sold in the U.S. last year, New York City
generates 5.0% of the nation’s rooms revenue.
Tuesday and Wednesday nights keep outperforming the other days of
the week with achieved rates of over $190.00. Occupancy on those nights
rose to over 85%. In addition, Saturday night’s occupancy over
the last 12 months was recorded at over 85%, but the rate charged
was only $183.74. While the Saturday night ADR climbed some $20.00
over the last three years, there is still some upward potential given
the rates that were achieved prior to 9/11.
As mentioned previously, the uncertainties of the war in Iraq and the
negative impact of the SARS epidemic on international travel greatly
hampered the Manhattan lodging market's performance in the first four
months of 2003. However, market fundamentals started improving in the
second half of the year, and strong RevPAR increases were attained in
October through December 2003. The combination of an improved economic
climate in 2004 and the market's poor performance during the first four
months of 2003 resulted in exceptionally strong RevPAR gains in 2004.
In view of these historical trends, the continued recovery of the regional
and national economies, a favorable exchange rate of the euro against
the U.S. dollar, the recent closing of several hotels for condominium
conversions and only moderate supply growth, we project that marketwide
RevPAR will grow by roundly 17% in 2005, attributable to a 1.6% increase
in occupancy and a 15% gain in average rate. As the national economy
continues to recover, we project that in 2005, Manhattan's occupancy
and average rate will exceed the 2000 levels.
Based on an analysis of the historical data and a review of proposed
hotels, we have prepared the following forecast for the Manhattan lodging
market.
|
Year
|
No. of Rooms |
Percent Change |
Occupied Rooms |
Percent Change |
Occupancy |
Percent Change |
Average Rate |
Percent Change |
RevPAR� |
Percent Change |
|
1987
|
52,683 |
- |
14,624,039 |
- |
76.1% |
- |
$113.05 |
- |
$85.98 |
- |
|
1988
|
52,768 |
0.2% |
14,634,194 |
0.1% |
76.0 |
(0.1)% |
120.11 |
6.2% |
91.26 |
6.1% |
|
1989
|
52,724 |
(0.1) |
13,873,898 |
(5.2) |
72.1 |
(5.1) |
132.09 |
10.0 |
95.23 |
4.3 |
|
1990
|
54,421 |
3.2 |
14,139,816 |
1.9 |
71.2 |
(1.3) |
132.34 |
0.2 |
94.21 |
(1.1) |
|
1991
|
55,058 |
1.2 |
13,442,624 |
(4.9) |
66.9 |
(6.0) |
127.54 |
(3.6) |
85.31 |
(9.4) |
|
1992
|
56,235 |
2.1 |
13,871,555 |
3.2 |
67.6 |
1.0 |
126.27 |
(1.0) |
85.33 |
0.0 |
|
1993
|
56,190 |
(0.1) |
14,494,889 |
4.5 |
70.7 |
4.6 |
126.33 |
0.1 |
89.28 |
4.6 |
|
1994
|
56,083 |
(0.2) |
15,156,219 |
4.6 |
74.0 |
4.8 |
136.12 |
7.7 |
100.78 |
12.9 |
|
1995
|
56,285 |
0.4 |
15,410,904 |
1.7 |
75.0 |
1.3 |
149.33 |
9.7 |
112.02 |
11.2 |
|
1996
|
56,552 |
0.5 |
16,654,408 |
8.1 |
80.7 |
7.6 |
160.72 |
7.6 |
129.68 |
15.8 |
|
1997
|
57,424 |
1.5 |
17,158,942 |
3.0 |
81.9 |
1.5 |
176.86 |
10.0 |
144.79 |
11.7 |
|
1998
|
57,943 |
0.9 |
17,415,191 |
1.5 |
82.3 |
0.6 |
198.25 |
12.1 |
163.24 |
12.7 |
|
1999
|
59,586 |
2.8 |
17,633,528 |
1.3 |
81.1 |
(1.5) |
208.15 |
5.0 |
168.76 |
3.4 |
|
2000
|
61,026 |
2.4 |
18,635,765 |
5.7 |
83.7 |
3.2 |
222.60 |
6.9 |
�186.23 |
10.4 |
|
2001
|
62,763 |
2.8 |
17,062,398 |
(8.4) |
74.5 |
(11.0) |
195.66 |
(12.1) |
145.73 |
(21.7) |
|
2002
|
63,296 |
0.8 |
17,337,034 |
1.6 |
75.0 |
0.8 |
185.88 |
(5.0) |
139.49 |
(4.3) |
|
2003
|
64,446 |
1.8 |
17,845,383 |
2.9 |
75.9 |
1.1 |
181.33 |
(2.4) |
137.56 |
(1.4) |
|
2004
|
64,229 |
(0.3) |
19,495,746 |
9.2 |
83.2 |
9.6 |
201.76 |
11.3 |
167.78 |
22.0 |
| Forecast |
|
2005
|
64,470
|
0.4%
|
19,885,661
|
2.0%
|
84.5
|
1.6%
|
$232.02
|
15.0%
|
$196.07
|
16.9%
|
|
2006
|
65,687
|
1.9
|
20,084,518
|
1.0
|
83.8
|
(0.9)
|
259.87
|
12.0
|
217.69
|
11.0
|
|
2007
|
66,035
|
0.5
|
20,486,208
|
2.0
|
85.0
|
1.5
|
285.85
|
10.0
|
242.96
|
11.6
|
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Source: Smith Travel Research
Some figures may be subject to small rounding errors
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