As supply has flooded the market, hotel revenue has tanked in New York City for years, from 4.8% growth in revenue per available room in December 2013 down to negative 2% at the beginning of 2016. But brighter days are ahead.

In 2016, RevPAR still declined by a couple of percentage points, JLL SVP Lauro Ferroni told Bisnow, but occupancy rates were flat despite thousands of new rooms coming online, and, as shown in the above chart, RevPAR growth improved as the year went on.

"A lot of the pain has already passed with a lot of new hotels opening up and a lot of factors having been exacerbated in 2016," Ferroni said. "So we feel now that a floor is starting to build and we’re going to see some upward momentum."

Another reason for optimism: Ferroni said JLL has gathered data that indicates the number of people who plan to host guests via Airbnb or other home-sharing sites has stopped growing considerably. That's even before the new state laws imposing stricter penalties on short-term rentals take effect.

"We’ve surveyed residents to see if they would put their houses on the [home-sharing] market, and our research found that for the most part, people who have wanted to do this have already kind of joined the foray," Ferroni (above) said. "So it’s not an exploding phenomenon anymore. That bolsters what hotels are able to accomplish."

There were several factors in 2016 that could have led to a decrease in tourism to New York City: the economic uncertainty that led millions of Americans to vote for President-elect Donald Trump, the strong dollar in the wake of Brexit and foreign economies stumbling, and the presence of terrorism.

Despite those risk factors, New York City tourism was as strong as ever. Tourism increased every year from 2009 to 2015, according to NYC & Company, the city's tourism marketing agency, and was projected to grow from 58.3 million tourists in 2015 to 59.7 million last year.

"Anecdotally, walking around anywhere in Times Square or Fifth Avenue or Lower Manhattan, the city feels packed," Ferroni said. "Hotels, because of the new supply, they’ve seen the highest number of occupied room nights ever, and we expect that growth curve to look the same."

Ferroni said the specter of terrorist attacks has helped New York, as travelers who might have visited European cities like Paris — which has been attacked twice in the last two years — could see the Big Apple as a safer alternative.

Supply remains an issue — hotel construction permits were up 31% year-over-year in 2016, although largely concentrated in the outer boroughs — but some feel that the growing number of hotels coming to NYC has been overblown.

"I think most hotel investors will tell you that there’s a lot of supply coming on, which is true," Hidrock Properties president Abie Hidary (above) told Bisnow. "I think people have incorrect assumptions about how much supply is coming on for a variety of reasons. Growth is going to be slightly negative to flat, but nowhere near the big reductions that have been predicted."

Hodges Ward Elliott director Jay Morrow told us some developers could decide to change their hotel plans to residential or office, which would help stem the tide and benefit existing hoteliers.

"When you’re looking at building permits on hotel rooms and overall supply," Morrow said, "if there’s a curve off there, or developers switching to residential, we think there’s going to be an absolute acceleration on the back end."

Hidary is a winner of the current hotel market; Hidrock just banked $203.3M when it sold the Courtyard Marriott World Trade Center to a German fund.

While the hotel sales market cooled considerably in 2016, dropping 28% year-over-year in NYC, Ferroni said the city outperformed the rest of the country, which isn't dealing with the same supply glut. And even dipping 28% still meant $4.8B worth of hotels transacted last year; not exactly pennies. But investor confidence may be the last thing to come back.

"Anytime you have a market that’s declining, there’s definitely anxiety over how far it can fall," Morrow said. "That kind of had everybody on edge. But there’s an ability to buy some product at really good basis, and some product at better yield."