Michael R. Bloomberg
Mayor of the City of New York

As the "World's Second Home," New York City appeals to business and leisure travelers from every corner of the globe. In fact, 2005 was a banner year for tourism in our City, with a forecasted 41.4 million visitors, up 3.7% from 2004.

Millions of people are discovering the rich diversity of our cosmopolitan city. New York City's accommodations, attractions, dining, entertainment, shopping, sporting events, theater, and performing arts are the best in the world. In 2005, it is projected that more than 22 million hotel room nights were sold; Broadway had its most successful year ever, grossing more than $825 million; and attendance at the Javits Center was the second highest on record.

New York is also seeing significant growth in international travel, including an increase in visitors from Mexico, China, Hong Kong, Brazil, India, and Russia. International visitors in 2006 are likely to exceed seven million, surpassing pre-9/11 records.

There has never been a better time to visit the greatest city on earth. New York remains the safest large city in the United States and the visitation forecast indicates that more than 43 million visitors will come to New York in 2006. Expect those visitor numbers to increase as more people experience the best of the Big Apple!

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.

Stephen Rushmore
President & Founder, HVS International

Manhattan hotels shattered records in 2005, recording the highest average occupancy, 85%, since 1987, the earliest year for which STR data for Manhattan is available. RevPAR increased by 6% over the level for 2000, the former peak year, and registered double-digit growth ranging from 14% to 28% every month in 2005. The strong RevPAR performance was driven primarily by significant growth in average rate as hotels operated at near-maximum-capacity levels, increasing the already present compression in the Manhattan market. As a result of the strength of the Manhattan lodging market, hotel values increased between 30% and 50% in 2005 compared to the previous year. In most cases, hotels are again the highest and best use for Manhattan properties today. The Empire Hotel, for example, which was acquired in 2003 with the intention of converting the property to condominiums, is currently under renovation and will be reopened as a hotel. In light of the very positive sentiment in the Manhattan market, HVS expects further growth in hotel values over the next few years.

Lalia Rach
Ed.D, Associate Dean, The Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management

The Manhattan hotel market is the beneficiary of surging demand, diminished inventory, the weak dollar, and a positive economy. It is the era of exuberance as measured by rates, occupancy, and profits.

Dr. Lalia Rach Associate Dean and HVS International Chair Preston Robert Tisch Center for Hospitality, Tourism and Sports Management New York University.

Cristyne L. Nicholas
President & CEO, NYC & Company

Exciting developments are under way for the New York City travel and tourism industry. NYC & Company, the city's convention and visitor bureau, is working in partnership with the City and our tourism partners on initiatives designed to attract 50 million visitors to New York by 2015. To accomplish that goal, there are a number of developments and key investments in tomorrow’s visitor market that are currently underway.

Our top priority is breaking ground on the Jacob K. Javits Convention Center expansion this summer. NYC & Company, under the leadership of our Chairman Jonathan M. Tisch, is spearheading the campaign to approve the proposed design and an immediate start for construction. The upgrade, expansion and modernization of the Javits into a world-class, state-of-the-art urban convention center will allow New York to recapture its market share and global advantage in the convention and trade show industry.

In 2005, a record 41 million visitors experienced the excitement of New York City and NYC & Company projects another banner year in 2006. Positive forecasts indicate that visitation to New York City will increase by 4.5 percent to an all-time high of 43.3 million visitors, including a record 7.2 million international visitors and 36 million domestic visitors. A key growth market for New York City's economy, tourism generates more than $22 billion in spending, $5.4 billion in taxes and $13 billion in wages representing 329,000 travel and tourism jobs in all five boroughs.

To help accommodate the increased demand, nearly 5,000 new or renovated rooms will be added to the current inventory of approximately 70,000 hotel rooms by the end of 2007. NYC & Company continues to work with its tourism partners and the Bloomberg administration to promote the new Brooklyn Cruise Terminal in Red Hook and ongoing enhancements to the New York City Passenger Ship Terminal on the West Side of Manhattan, as well as the redevelopment and preservation of Governors Island, development of new stadiums for the Yankees and Mets baseball teams and other important initiatives.

Mark Lomanno
President, Smith Travel Research

The performance of New York hotels continues to impress. Overall market occupancies have continued to improve and now rest at about 83 percent on an annualized basis. This level of occupancy is consistent with the peak reached in late 2000 and is driven by strong room night demand growth and a slight reduction in overall room supply. In fact, the supply/demand dynamics have begun to drive hotel performance in the areas outside of NYC, especially suburban New Jersey and Long Island. Mid-week occupancies are extremely strong, averaging just under 90 percent over the past year.

Room rate growth has also been strong with rates up over 14 percent in the last year. While the average cost of a hotel room in NYC is now above levels achieved in early 2001 in absolute terms, when one factors in the inflation rate, rates are still well below what guests paid at that time in real dollars. At the current rate of price acceleration it will still be several years before rates, again in real dollars, reach the levels achieved at the end of the last cycle.

Considering the factors mentioned above, it is a very dynamic time for hotels in NYC. Reduced supply, strong demand, and pricing will likely result in several very profitable years for hotels in this market.

Joseph Spinnato
President & CEO, Hotel Association of NYC

There is no question that 2005 was an extremely successful year for the hotel industry in New York City. The number of visitors, both domestic and international, rose significantly, causing occupancy rates to rise to record levels.

Projections for 2006 indicate another very positive year for the hotel industry. Also, the plans for the expansion of the Jacob K. Javits Convention Center continue to move forward. The construction of the center is scheduled to begin later on this year, thereby allowing our marketing people to go ahead and book meetings and conventions into 2010 and beyond. This is a very exciting period for our industry, and 2006 should see some fascinating accomplishments.

Thomas J. Travers
General Manager, Hotel Beacon
President, Hospitality Sales & Marketing Association International Big Apple Chapter

Competition for travelers continues to intensify among world-class destinations with NYC at the top of that list. While the Big Apple has always caused some sticker shock to certain groups, the NYC visitor experience remains persuasive, as our product mix and quality constantly improves. The challenge continues to be managing our guests' ever-increasing expectations in the midst of escalating costs pressuring both profits and service.