• In terms of job functions, more than three quarters (76.1%) of the respondents were General Managers (44.8%) and Sales & Marketing staff (31.3%). Revenue Managers (14.9%), Operations (3.0%), and employees with other job roles (6.0%) made up the remaining 23.9% of respondents. Other job functions included Vice President of Operations, Consultant, and Management Recruiter.
  

  

  
  
• Focusing on hotel market segments, the top three participating segments are the Upper Upscale segment (23.4%), the Upscale segment (21.9%), and the Midscale without F&B segment (18.8%), which made up 64.1% of the total respondents. The Luxury (17.2%), Midscale with F&B (15.6%), and Economy (3.1%) segments constituted the remaining 35.9% of total respondents.
  

  

  
  
• Examining results by Manhattan neighborhoods, the Midtown area (Midtown East with 24.6%, Midtown West with 42.6%, and Midtown South with 11.5%) accounted for 78.7% of the results, with Lower Manhattan (11.5%) and Upper Manhattan (9.8%) totaling 21.3% of the results.
  
  
• Studying results by brand affiliation, the majority of respondents (66.7%) were in fact brand affiliated. Brand affiliations include Choice, Hilton, Holiday Inn, Hyatt, Mandarin Oriental, Marriott, Morgans Hotel Group, Radisson, Sheraton, Waldorf=Astoria, and Wyndham, among others.

• Overall, 46.5% of respondents replied that they budgeted for an increase in NOI, while 41.9% budgeted for a decrease, and 11.6% said that there was no change.
  
  
• At 39.5% of respondents, an NOI increase of 1-10% was the most common response.
  
  
• At 23.3% of respondents, an NOI decrease of 1-10% was the second most common response.
  
  
• It is interesting to note that 56% of hoteliers working in higher-end properties (Upscale to Luxury) responded that NOI was budgeted to increase, while the majority (44.4%) of hoteliers working in lower-end properties (Economy to Midscale) reported that NOI was budgeted to decrease.
  
  
• It is also worthy to note that 53.1% of hoteliers working in Midtown Manhattan (East, West and South) responded that NOI was budgeted to increase, while 66.7% of hoteliers in Upper and Lower Manhattan reported that NOI was budgeted to decrease.
  
  
• Finally, 56% of hoteliers working in branded hotels responded that NOI was budgeted to increase, while the majority (47.1%) of hoteliers working in independent hotels reported that NOI was budgeted to decrease.

Question 6: What is the projected percentage change in RevPAR from Q1 2010 through Q4 2011?

• Overall, the most common response was a quarter-over-quarter percentage growth in RevPAR of 1-5% (frequency of response: 26.3% to 59.4%).
  
  
• When broken down by job function, General Managers, Sales & Marketing Executives, and Revenue Managers were more optimistic about higher levels of RevPAR growth in 2011.
  
  
• Of all job functions, General Managers were the least optimistic, with the majority indicating that positive RevPAR growth will probably first occur in Q2 2010.
  
  
• Hoteliers working in higher-end properties (Upscale to Luxury) generally anticipated immediate quarterly RevPAR growth, while many hoteliers in lower-end properties (Economy to Midscale) expected that positive growth would not be seen until Q2 or Q3 of 2010.
  
  
• Hoteliers in Midtown East were the most optimistic, with the majority of responses indicating that positive RevPAR growth would be seen in Q1 2010. Hoteliers in Midtown West, Midtown South, and Upper Manhattan generally replied that this would occur in Q2 2010. The least optimistic neighborhood was Lower Manhattan, where the responses were highly fragmented and only converged to indicate that continuous RevPAR growth would be seen as of Q2 2011.
  
  
• The majority of independent hoteliers believed that positive RevPAR growth would not occur until Q2 2010, while branded hoteliers were generally more optimistic and indicated that positive RevPAR growth would be realized in Q1 2010.

Question 7: Please indicate the first quarter in which positive RevPAR growth is expected.

• Overall, 88.4% of respondents reported that their hotels would experience positive RevPAR growth in 2010.
  
  
• 51.2% of respondents believed that their hotels would experience positive RevPAR growth in the first half of 2010, while 37.2% said it would be the second half of 2010.
  
  
• At 30.2% of respondents, Q1 2010 was the most common response.
  
  
• It is interesting to note that 70.8% of hoteliers working in higher-end properties (Upscale to Luxury) responded that positive RevPAR growth would first be experienced in the first half of 2010, while the majority (50.0%) of hoteliers working in lower-end properties (Economy to Midscale) reported that it would come in the second half of 2010.
  
  
• It is also interesting to note that 60.0% of hoteliers working in branded hotels responded that positive RevPAR growth would first be experienced in the first half of 2010 while the majority (50.0%) of hoteliers working in independent hotels reported that growth would occur in the second half of 2010.

Question 8: When do you expect your RevPAR to return to 2008 peak levels?

• Overall, 68.2% of hoteliers believed that their RevPAR would return to 2008 peak levels from 2011 to 2013.
  
  
• With 31.8% of responses, 2012 was the most common response.
  
  
• It is interesting to note that hoteliers working in branded hotels tended to feel more strongly that RevPAR would return to 2008 peak levels in 2012 (42.3%), while hoteliers working in independent hotels were split between 2011 and 2013 (37.5% and 31.3%, respectively).
  

Question 9: Please rank the following strategies by importance in 2010, with 1 as the least important and 5 as the most important.

• Maximizing room rate, occupancy, and operational efficiency were the top three strategies for increasing revenue in 2010, with rankings of 4.41, 3.03 and 3.02, respectively.
  
  
• 43.9% of all respondents reported that maximizing room rate would be the best strategy for 2010, while only 2.5% of respondents stated that room rate would not be a strategy for 2010.
  
  
• Between 49-53% of respondents (depending on chain scale, location, and brand affiliation) reported that occupancy would be a key strategy in 2010.
  
  
• On average, 26.2% of respondents stated that Operational Efficiency would be the best strategy for their properties in 2010.
  
  
• The majority of respondents reported that Return on Marketing Investment (ROMI) was the least important strategy for 2010. 52.2% of General Managers responded accordingly.
  
  
• Lower Manhattan respondents were least concerned with room rates as a strategy for 2010, with none of them identifying room rate strategy as greatly important, compared to 66.7% of Midtown West respondents, who identified it as the greatest strategy for 2010.
  
  
• 48.0% of respondents from branded properties believed room rate was the most important strategy, while 31% of respondents from independent properties thought the same.
  

Question 10: With the Manhattan market expected to add approximately 10% more rooms within the next two years, do you think this influx will have an impact on your property?

• 73.3% of respondents reported that the expected increase in room supply in Manhattan will have an impact on their property. Of those respondents, 70% are General Managers.
  
  
• 71.4% of respondents from all chain scales agreed that the influx of supply will have an impact on their property.
  
  
• Those properties most concerned with the influx of supply over the next two years are located in Lower Manhattan, Midtown South, and Midtown West, with 100%, 100%, and 77.8% respondents, respectively.
  
  
• 81.3% of hotel professionals at independent properties claim that the influx of room supply will have an impact on their properties compared to 69.2% of hotel professionals at branded hotels.

Question 11: Please rank which of the following will be affected the most by the new supply, with 1 having the least impact and 3 having the most impact.

• Results from the survey indicate that ADR will be affected the most by the new supply, with a weight of 2.28. “Both occupancy and ADR will be affected equally” came in second with a rank of 2.03, and finally, respondents indicated that occupancy would have the least impact, with a rating of 1.92.
  
  
• 48.0% of respondents who reported that the new supply would have great impact identified ADR as the revenue factor that would be affected the most.
  
  
• 47.1% of respondents agreed that the new supply would have the greatest impact on both indicators.
  
  
• 100% of respondents from the luxury chain scale stated that both indicators would be greatly impacted by the new supply expected.
  
  
• 50% of respondents from both branded and independent properties believed that both indicators would be impacted by the new room supply.
  
  
• The majority of all respondents across geographic location – Lower Manhattan, Midtown South, Midtown East, and Midtown West – anticipated the new supply to greatly impact both indicators, with responses of 50.0%, 50.0%, 60.0%, and 75.0%, respectively.

Question 12: Please rank the following distribution channels for rooms revenue generation with 1 as the least and 5 as the greatest revenue generator.

• The top three rooms revenue generators were found to be the property/corporate website, third-party websites, and the central reservations/call center, with scores of 3.09, 3.04, and 3.03, respectively.
  
  
• Respondents indicated that travel agents are the least effective in revenue generation, with a rating of 2.54.
  
  
• 27.9% of respondents rated property reservations as the most important channel of distribution, while 30% ranked it as the least.
  
  
• 31.8% of GMs believed that the Central Reservations/Call Center is the least effective channel of revenue distribution.
  
  
• 37.5% of Revenue Managers stated that the Central Reservations/Call Center is the least effective channel of revenue distribution.
  
  
• 37.0% of hotel professionals who work at branded properties believe that the Central Reservations/Call Center is the best revenue generator compared to 20.0% of hotel professionals at independent properties.

Question 13: In 2009, what was the revenue generated from your brand reservation system?

• The majority of respondents (30.8%) were not affiliated with a brand and therefore did not rely on brand reservation systems.
  
  
• 20.5% of respondents reported that less than 10% of their 2009 revenue was generated from brand reservation systems.
  
  
• 75.0% of Luxury hotel respondents received less than 10% of their revenue from brand reservations systems. Comparatively, 23.1% of Upper Upscale respondents reported that they received 41-50% of their revenue from brand reservations systems.
  
  
• None of the chain scales reported receiving over 70% of their revenue through their brand reservations systems. Only 14.3% of Midscale properties with Food and Beverage reported seeing 61-70% of their revenue from brand reservations systems.

Question 14: What percentages of your guests fit the following categories?

• A majority of survey respondents (25%) indicated that the leisure segment accounted for 21-30% of their hotel guests.
  
  
• 22.5% of the survey respondents indicated that the business segment makes up 21-30% of their hotel guests, while another 22.5% of the survey respondents indicated that the business segment represents 61-70% of their guests.
  
  
• A majority of survey respondents (42.1%) indicated that the meeting & group segment represents less than 10% of their hotel guests.

Question 15: How do you anticipate that demand for your hotel in 2010 will change from the 2009 level in the following guest categories?

• Overall, more than 45% of the respondents anticipate that demand will increase by 1-10% across all segments.
  
  
• In the leisure segment, the majority of respondents (45.0%) anticipate that demand will increase by 1-10%.
  
  
• For the business segment, the majority of respondents (55.0%) anticipate that demand will increase by 1-10%.
  
  
• Finally in the meeting & group segment, the majority of respondents (47.4%) anticipate that demand will increase by 1-10%.
  
  
• Respondents working in higher-end (Upscale to Luxury) hotels display a more positive attitude than lower-end chain segments respondents (Economy to Midscale) with regards to the business and meeting & group segments. In higher-end properties, 76.2% of the hoteliers expect meeting & group demand to increase, while 62.5% of hoteliers in lower-end properties predict that meeting & group demand will not change or will even decrease. According to 66.7% of Luxury hoteliers, business demand will increase more than 10%, 61.8% of the Upper Upscale to Midscale without F&B expect business demand will increase by 1-10%, and 100% of the Economy scale hoteliers expect business demand will not change.
  
  
• It is important to note that in terms of leisure business, certain neighborhoods display more resistance to recovery than others. 50% of Lower Manhattan and Midtown East hoteliers indicate that there will be no change in leisure demand. 53.8% of Midtown South, Midtown West, and Upper Manhattan hoteliers anticipate a 1-10% increase in leisure demand.
  
  
• Hoteliers in Midtown South are less confident than those from other neighborhoods with regards to the business and meeting & group segments. 50% of Midtown South hoteliers expect there will be no change in the above segments, while 56.1% of hoteliers in other neighborhoods expect a 1-10% increase in these segments.

Question 16: How did the volume of your domestic traveler segment change in 2009 compared to the volume for the prior year?

• More than 37.8% of the overall survey respondents indicated that domestic demand decreased 1-10% across all segments in 2009.
  
  
• In terms of the domestic leisure segment, 37.8% of the respondents indicated that demand decreased 1-10% in 2009.
  
  
• With regards to the domestic business segment, 37.8% of the respondents indicated that demand decreased 1-10% in 2009, while another 37.8% reported that demand decreased more than 10%.
  
  
• As for the domestic meeting & group segment, 42.9% of the respondents indicated that demand decreased 1-10% in 2009.
  
  
• Upper Upscale is the only segment in which most hoteliers (50%) experienced positive growth in domestic leisure demand, while 63% of other segments experienced a decrease in domestic leisure demand in 2009.
  
  
• Lower Manhattan is the only neighborhood where most of the hoteliers experienced positive growth in domestic leisure demand. Specifically, 50% of the Lower Manhattan hoteliers reported a 1-10% increase in domestic leisure demand, while 61.3% of hoteliers in other neighborhoods experienced a decline in domestic leisure demand.
  
  
• Independent hotels experienced a steeper decline in domestic business demand than branded hotels. Specifically, 42.9% of independent hoteliers reported a more than 10% decline in domestic business demand, while 50% of branded hoteliers reported a 1-10% decline.

Question 17: Please rate each of the following factors in terms of its importance in attracting domestic guests to Manhattan hotels.

• Price, location, and service quality are ranked the top 3 most important factors in attracting domestic guests to Manhattan hotels, with ratings of 4.5, 4.21, and 3.45, respectively.
  
  
• Language capabilities, sustainability initiatives, and F&B options are ranked the 3 least important factors to attract domestic guests, with ratings of 1.34, 1.62, and 1.90, respectively.
  
  
• The Luxury segment is less price-sensitive than other chain scales. Hoteliers in this segment ranked location as the most important factor, with a 4.75 rating, and rank price as the second most important factor, with a 4.50 rating. Hoteliers of the other chain scales rank price as the most important factor, with an average rating of 4.51.
  
  
• The Midtown East neighborhood is less price-sensitive than other neighborhoods. The hoteliers in this neighborhood rank location as the most important factor, with a 4.44 rating, and rank price as the second most important factor, with a 4.11 rating. Hoteliers of the other chains rank price as the most important factor, with an average rating of 4.60.
  
  
• Price, location, and service quality are the top 3 factors for General Managers and Sales and Marketing staff. Meanwhile, in addition to these factors, amenities is among the top 3 factors for Operations and Revenue Management staff.

Question 18: Did the volume of your 2009 international traveler segment change compared to the level for the prior year?

• About 32.7% of Manhattan hotels experienced a 1-10% decrease in overall international travel volume, with the highest drop noted in the international business traveler segment. Additionally, 30.1% of the hotels experienced no change in international travel segments, while 18.6% experienced a 1-10% increase, with the highest increase seen in the international leisure segment.
  
  
• Overall, 18.6% of respondents anticipate international inbound traveler volume to increase by 1-10% across all segments.
  
  
• In the international leisure segment, 10.6% of the respondents anticipate that demand will increase by 1-10%, which is the majority for this particular segment.
  
  
• For the business segment, the majority of respondents (13.3%) anticipate demand to decrease by 1-10%.
  
  
• As for the meeting & group segment, the majority of respondents (12.4%) reported no change in demand.
  
  
• Surprisingly, only 5.3% of Luxury segment respondents experienced a 1-10% decrease in the international business segment, with 13.2% of Midscale with F&B hotels showing the highest drop in this segment. About 10.5% of respondents in Upscale hotels saw the greatest increase in international leisure travelers.
  
  
• The Midtown West area saw the greatest fluctuations in international travel, with a 27.8% decline in international business travelers, as well as a 20% decrease in the international meeting & group segment.
  
  
• 24.8% of both brand-affiliated and independent properties saw the greatest declines of 1-10% in the international business and international meeting & group segments.

Question 19: Please rate each of the following factors in terms of its importance to attracting international guests to Manhattan hotels.

• Price, location, and service quality were ranked as the top 3 most important factors in attracting international guests to Manhattan hotels, with ratings of 4.45, 4.40, and 3.32, respectively.
  
  
• Sustainability initiatives, F&B quality, and F&B options were ranked the 3 least important factors to attract international guests, with ratings of 1.20, 2.00, and 2.05, respectively.
  
  
• Although international travelers who stay at Luxury segment hotels are seemingly less price-sensitive than international travelers at other chain scales, hoteliers ranked price and location as the two most important factors in attracting these particular travelers, with ratings of 4.5 and 4.8, respectively.
  
  
• Midtown West was the most price-sensitive neighborhood for international guests, rating price at an average of 4.6 out of 5. On the other hand, Midtown East was the least price-sensitive neighborhood for this segment, rating price at an average of 4.2 out of 5.
  
  
• Price, location, and service quality were ranked as the top 3 most important factors for attracting international travelers by General Managers and Sales and Marketing staff. Amenities also ranked highly among General Managers and Revenue Managers, with ratings of 3 out of 5, and 3.3 out of 5, respectively.

Question 20: Which 3 countries/regions are the strongest generators of international travelers to your hotel?

• Results indicated that the top 3 countries/regions that generate the highest volume of international travelers are the UK with 23.6%, Europe (excluding Germany, Russia, and the UK) with 19.7%, and Canada with 14.2%.
  
  
• Results from General Managers reflected the above results. However, results from Sales & Marketing respondents showed Canada tied with Germany as the third country/region, while results from Revenue Managers rated Brazil and Germany tied as the third country/region.
  
  
• Brazil ranked highly in Midtown East and Upper Manhattan properties, while Germany also ranked highly in Lower Manhattan and Midtown West hotels.
  
  
• Independent hoteliers responded that the UK, Europe (excluding Germany, Russia, and the UK), and Germany were their top 3 countries/regions.

Question 21: By what percent do you expect your room rates to change from 2009 to 2010?

• Almost 50% of all respondents expect the leisure, business, and meeting and group segments to increase between 1% and 10%. 29% percent of all respondents expect the meeting and group segment to have no change, and decreases of 1-5% are expected by 15.0% of respondents in the business segment, and 12.5% in the leisure segment.
  
  
• 52% of branded hotels expect leisure room rates to increase 1-5% from 2009 to 2010.
  
  
• 35.7% of independent hotels expect an increase in room rate of 1-5%, while 28.5% of the same group expect an increase of 6-10% in the leisure segment.
  
  
• Much like the leisure segment, 52% of branded hotels expect an increase of 1-5%. Different from the leisure segment, 43% of independent hotels expect an increase of 1-5%.
  
  
• On the meeting and group segment side, branded hotels are split, with 24% in each of these categories: increase 1-5%, no change, and decrease 1-5%.
  
  
• Of the independent hotels, 46% expect a 1-5% increase, while 30% expect a decrease of some kind.
  
  
• When broken down by chain scale segment, 82% and 87% of Upper Upscale and Upscale, respectively, expect some kind of increase in room rate, while only 66% of Midscale with F&B and 50% of both Economy and Luxury segments expect increases.

Question 22: How do you expect your hotel's year-end 2010 ADR to compare to ADR as of year-end 2009?

• Overall, 44.7% of respondents expect ADR to increase in 2010 by 1-5%; however, 23.7% expect a decrease of 1-5% in ADR. Only 15.8% expect ADR to decrease more than 5%, and only 13.2% expect an increase of more than 5%. No respondents expect more than a 10% increase in ADR year over year.
  
  
• 50.0% of independent hotels expect an increase of 1-5% in ADR, while only 39.1% of branded hotels agree. 22.7% of branded hotels expect a decrease of 1-5%, and 17% expect a decrease of 6-10%.
  
  
• 40.9% of General Managers expect an increase of 1-5% in ADR as do 47% of Sales and Marketing respondents. Twenty percent of Sales and Marketing respondents expect a decrease of 6-10% in ADR, while 13.6% of General Managers expect a 6-10% increase in ADR.

Question 23: How do you expect your hotel's year-end 2010 occupancy to change from the year-end 2009 level?

• 42.1% of all respondents expect year-end occupancy for 2010 to increase by 1-5%, while 26.3% of all respondents expect no change. 13.2% of all respondents expect a decrease, while 60.5% of all respondents expect an increase in year-end occupancy.
  
  
• 30.4% of hoteliers in branded hotels indicate that they do not expect any change in occupancy while 64.3% of hoteliers in independent hotels say they expect an increase of 1-5%.
  
  
• 28.5% of General Managers responded that there would be no change, while 38.1% answered that there would be a 1-5% increase, and 19% forecasted a 6-10% increase.
  
  
• 43.7% of Revenue Managers and Sales and Marketing Executives also expect a 1-5% increase, while 25% expect no change.
  
  
• 45.4% of Upper Upscale hotels expect an increase of 1-5%, while 66.6% of Midscale with F&B hotels expect no change.

YEAR OVER YEAR COMPARISON

The following analysis is a comparison between years 2009 and 2010 based on the Manhattan Hotel Market Overview survey results. In addition to a general edit of the 2009 survey, five questions were removed and four new questions were added to make the 2010 survey more relevant to the theme of hotel market recovery.

• The 2009 survey indicated that the majority (74%) of all respondents expected a decrease in demand in their leisure market, while the most common response in the 2010 survey was that 45% of all respondents expect a 1-10% year-over-year demand increase in the leisure segment.
  
  
• In the business segment, 2009 respondents were less optimistic as 85% anticipated a decrease in their year-over-year demand, while 55.0% of all 2010 respondents anticipated an increase of 1-10% in business demand.
  
  
• In terms of the meeting & group segment, a majority of 2010 respondents (47.4%) anticipate that demand will increase by 1-10%, while in 2009, 67.2% anticipated a decrease in demand for that year.
  
  
• The majority of 2009 survey respondents reported a decrease of less than 10% in their domestic leisure travelers for 2008. They also reported a decrease in domestic business and domestic meeting & group demand of greater than 10% in the same year. However, the 2010 survey indicates that the decrease in the domestic business and domestic meeting & group segments has slowed, as the majority reported a 1-10% decrease across all domestic segments in 2009.
  
  
• The majority of respondents in both 2009 and 2010 reported a decrease in international travelers over the respective prior years, with the highest drop in the international business traveler segment. Both surveys indicated that the top three countries/regions that generate the highest volume of international travelers are the UK, Europe, and Canada.
  
  
• In 2009, only 12.5% of respondents expected a higher annual occupancy, with the majority of all respondents anticipating a lower occupancy; however, according to the 2010 survey, 42.1% of all respondents expect year-end occupancy for 2010 to increase by 1-5%, while 26.3% of all respondents are expecting no change.
  
  
• With regard to ADR, the 2009 survey showed that 79.5% of respondents expected their year-end ADR for 2009 to be lower than for year-end 2008. The 2010 survey respondents were more optimistic, as 44.7% expect ADR to increase by 1-5%.
  
  
• In 2009, the three most important strategies were maximizing occupancy, maximizing room rate, and maximizing operational efficiency, in that order. In 2010, however, respondents indicated that maximizing room rate was of the greatest importance, while maximizing occupancy and operational efficiency were tied for second.
  
  
• In 2009, third-party websites was ranked as the top distribution channel while property/corporate websites was rated the top in 2010. This displays the hoteliers’ efforts in maximizing room rate as the costs associated with using third-party websites to sell rooms are high.

CONCLUSION

This survey research indicates that Manhattan hoteliers are confident that the recovery phase in the business cycle has begun. The general expectation from the respondents is that there will be an increase in demand from all segments of the market, and year-over-year occupancy will increase. ADR and RevPAR are also expected to increase; however, RevPAR is not expected to return to peak levels until 2012.

Maximizing room rate, occupancy, and operational efficiency are at the top of all hoteliers strategies for increasing revenue in 2010. However, it is anticipated that this will be difficult due to the increase in room supply in Manhattan, which will have an impact on existing hotels.

This project will contribute to the New York City hotel industry by providing a comprehensive understanding of how the economy affects the hotel industry, especially the perspective on the current economic state of New York City and its stage in the business cycle. This research is also significant in identifying future trends and how these trends will affect the New York City hotel market specifically. In addition, the project has provided valuable information on the Manhattan hotel market in 2010 and can serve as a reference for future research.

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