New York Hotel Occupancy Rates Are Down For The Third Week
After a winter and spring that devastated hotels in New York, summer is not looking hopeful either.
The occupancy rate at hotels across New York City dropped from 45.7% to 43.6% overall this week, The Real Deal reports. This is the third week this number has fallen. Revenue per available room has fallen from $57.86 to $55.37 this week.
The hotel sector’s situation has become increasingly dire as the months of the coronavirus pandemic wear on. With tourism essentially on pause, 25,000 rooms — nearly 20% of New York's overall supply — may never recover or open their doors to guests again, The Wall Street Journal reported June 16.
“Covid ... was the final nail in the coffin,” Green Street Advisors analyst Lukas Hartwich told The Journal.
Times Square Edition at 20 Times Square, which had 452 rooms, recently said that it would not reopen after only a year of business, as hotel owners continue to grapple with distress. The ownership of the city’s most expensive hotel, The Mark, is set for a UCC foreclosure auction after the hotel’s owner, Alexico Group, failed to make mortgage payments.
Leaders of New York’s hotel sector, which was struggling before the virus hit, have used the pandemic to rethink and restrategize uses of space. Hotel rooms were put to use as the pandemic ravaged the city, providing shelter for people experiencing homelessness, or space for healthcare workers on the front lines of fighting the virus.
As hotels begin to reopen and bring back their furloughed employees, safety protocols have also been revamped. Last Friday, 130 hotels across the city, state and New Jersey struck a deal with the city’s hotel worker’s union, the New York Hotel Trades Council, that mandated temperature checks for all employees and required everyone working in the hotel to wear a mask.
“The unionized hotel industry in New York City is taking a smart approach to expanding health and safety standards inside hotels— which both protects workers and gives peace of mind to travelers,” New York Hotel Trades Council President Peter Ward told Crain's New York Business.
New York is not alone, as operations at hotels all around the country have come to a halt amid the pandemic. Nationally, occupancy rates are down 42% year-over-year, The Real Deal reported. Many investors are still waiting to see how the industry shakes out before underwriting new investments.