HVS International | 2006 Manhattan Hotel Market Overview

Manhattan Operating Statistics (Class)

HVS International compiled data provided by Smith Travel Research to illustrate the effects of the current state of the economy on different classes of hotels in Manhattan. The following tables compare the performance of all reporting hotels in Manhattan for year-end figures from 1999 through 2005; results are broken down by market segment: luxury, first class, boutique, and other.

Luxury

Year	Occupied Room Nights	% Change	Available Room Nights	% Change	Occupancy	% Change	Average Rate	% Change	RevPAR	% Change
2000	2,497,484	��	8,455	��	80.9%	��	$370.43	��	$299.79	��
2001	2,143,067	(14.2)%	8,354	(1.2)%	70.3%	(13.2)%	$329.64	(11.0)%	$231.68	(22.7)%
2002	2,340,711	9.2%	8,871	6.2%	72.3%	2.9%	$316.06	(4.1)%	$228.48	(1.4)%
2003	2,416,680	3.2%	8,983	1.3%	73.7%	2.0%	$308.77	(2.3)%	$227.58	(0.4)%
2004	2,606,073	7.8%	8,955	(0.3)%	79.7%	8.2%	$341.06	10.5%	$271.95	19.5%
2005	2,438,363	(6.4)%	8,070	(9.9)%	82.8%	3.8%	$398.48	16.8%	$329.85	21.3%
Average Annual Compounded Change: 2000-2005		(0.5)%		(0.9)		0.5%		1.5%		1.9%

Source: Smith Travel Research
Note: Some figures may be subject to small rounding errors
Note: Statistics based on selected hotels from a large database

First Class

Year	Occupied Room Nights	% Change	Available Room Nights	% Change	Occupancy	% Change	Average Rate	% Change	RevPAR	% Change
2000	6,435,987	��	20,937	��	84.2%	��	$230.55	��	$194.17	��
2001	5,878,573	(8.7)%	20,967	0.1%	76.8%	(8.8)%	$202.76	(12.1)%	$155.75	(19.8)%
2002	5,952,416	1.3%	21,009	0.2%	77.6%	1.1%	$192.42	(5.1)%	$149.37	(4.1)%
2003	6,265,601	5.3%	22,097	5.2%	77.7%	0.1%	$184.84	(3.9)%	$143.59	(3.9)%
2004	6,591,597	5.2%	21,443	(3.0)%	84.2%	8.4%	$207.05	12.0%	$174.38	21.4%
2005	6,841,094	3.8%	21,669	1.1%	86.5%	2.7%	$243.38	17.5%	$210.51	20.7%
Average Annual Compounded Change: 2000-2005		1.2%		0.7%		0.5%		1.1%		1.6%

Source: Smith Travel Research
Note: Some figures may be subject to small rounding errors
Note: Statistics based on selected hotels from a large database

Boutique

Year	Occupied Room Nights	% Change	Available Room Nights	% Change	Occupancy	% Change	Average Rate	% Change	RevPAR	% Change
2000	1,448,801	��	4,855	��	81.8%	��	$258.37	��	$211.23	��
2001	1,625,989	12.2%	6,348	30.8%	70.2%	(14.2)%	$217.86	(15.7)%	$152.87	(27.6)%
2002	1,831,547	12.6%	6,826	7.5%	73.5%	4.8%	$210.91	(3.2)%	$155.05	1.4%
2003	1,868,804	2.0%	6,847	0.3%	74.8%	1.7%	$212.38	0.7%	$158.80	2.4%
2004	1,986,007	6.3%	6,924	1.1%	78.6%	5.1%	$241.19	13.6%	$189.53	19.4%
2005	2,105,751	6.0%	6,977	0.8%	82.7%	5.2%	$277.48	15.0%	$229.45	21.1%
Average Annual Compounded Change: 2000-2005		7.8%		7.5%		0.2%		1.4%		1.7%

Source: Smith Travel Research
Note: Some figures may be subject to small rounding errors
Note: Statistics based on selected hotels from a large database

Other

Year	Occupied Room Nights	% Change	Available Room Nights	% Change	Occupancy	% Change	Average Rate	% Change	RevPAR	% Change
2000	4,026,745	��	13,031	��	84.7%	��	$155.40	��	$131.56	��
2001	3,584,306	(11.0)%	13,184	1.2%	74.5%	(12.0)%	$138.34	(11.0)%	$103.04	(21.7)%
2002	3,613,491	0.8%	13,325	1.1%	74.3%	(0.3)%	$123.71	(10.6)%	$91.91	(10.8)%
2003	3,669,309	1.5%	13,367	0.3%	75.2%	1.2%	$121.59	(1.7)%	$91.44	(0.5)%
2004	4,146,030	13.0%	13,348	(0.1)%	85.1%	13.2%	$136.47	12.2%	$116.14	27.0%
2005	4,154,808	0.2%	13,199	(1.1)%	86.2%	1.3%	$166.94	22.3%	$143.96	24.0%
Average Annual Compounded Change: 2000-2005		0.6%		0.3%		0.4%		1.4%		1.8%

Source: Smith Travel Research
Note: Some figures may be subject to small rounding errors
Note: Statistics based on selected hotels from a large database

Jonathan M. Tisch
Chairman & CEO, Loews Hotels
Chairman, NYC & Company

The year 2005 set a new benchmark for success and one that will help our industry reach new heights in the year ahead. Last year was a record-breaking year: 41 million people visited NYC; hotel occupancy was at 86 percent, the highest level in six years; and a record 22 million rooms were sold in 2005, an increase of more than one million over 2004. Travel and tourism is a vital force in our city today and a cornerstone of the City’s bright future. 5000 new hotel rooms will be added to the market by the end of 2007. From luxurious boutique hotels to budget inns, from Harlem to Staten Island, hotel development is enlivening neighborhoods across the City. And the Javits Convention Center modernization and expansion, scheduled to begin later this year, will further support and strengthen the City's $21 billion tourism industry.

A review of the previous tables reveals the following.

The boutique segment registered the strongest growth in supply from 2000 through 2005, increasing at an average annual compounded rate of roundly 7.5%. All remaining segments exhibited supply increases below 1.0%, on an average annual compounded basis.
Due to the very strong performance of the Manhattan lodging market in 2004 and 2005, all four segments showed positive average annual compounded growth in terms of both occupancy and average rate, during the historical period reviewed, resulting in RevPAR growth ranging between 1.6% in the first-class category and 1.9% in the luxury category.
The boutique segment has shown stronger and earlier signs of recovery than the other segments, as evidenced by the positive RevPAR growth in both 2002 and 2003. In 2005, all segments registered very strong RevPAR growth in the low-20s as a percentage.
All of the segments exceeded the former peak 2000 occupancy levels in 2005.
In terms of average rate, all segments registered a positive average annual compounded change between 2000 and 2005, ranging between 1.1% and 1.5%.
All of the segments recovered completely in 2005, and recorded further significant growth in terms of both occupancy and average rate, resulting in RevPAR growth ranging from a low of roundly 20.7% in the first-class segment to a high of roundly 24.0% in the other segment. The tremendous recovery recorded in 2004 and 2005 indicates the strength and unrivaled significance of the Manhattan lodging market.

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