Without Broadway, Hope For A 2020 NYC Tourism Rebound Fades Away
This Fourth of July, Americans across the country watched the Broadway smash Hamilton — a testament to the resilience of live theater in the 21st century — from their couches on streaming platform Disney+.
The production was filmed in 2016, but the musical’s marquee at Richard Rodgers Theater on West 46th Street in Manhattan has been dark since March, and it and dozens of other Broadway stages won’t raise a curtain until next year.
Last week, the nexus of American performing arts, Broadway, announced it would not reopen until Jan. 3 at the earliest. While the announcement didn’t come as a shock, the official pause on the quintessential New York experience is a testament to how far the city, ravaged by the coronavirus, has to go before getting back to normal. It also shows just how uncertain its future is, even as New York begins to open back up with Phase 3 on Monday.
“If you walked Broadway on a given evening before all this, you couldn’t walk on the street, it was so crowded,” BD Hotels owner Richard Born said. “Clearly, Broadway is what packs people in Times Square.”
BD Hotels is one of the largest private hotel owners in New York City and owns nine hotels in the Midtown West area that, in part, rely on tourists with theater tickets, including the 665-room Pod Hotel Times Square. All of the company’s hotels are temporarily closed.
Broadway is the beating heart of New York City’s tourist appeal. During its 2018-2019 season, 14.8 million people saw a Broadway show, 65% of whom were domestic and international tourists, bringing in $14.7B to New York City’s economy and supporting 96,900 jobs, according to The Broadway League, Broadway’s trade association.
“New York has become an urban Disneyland,” Born said. “There are a handful of features that make it Disneyland. ... Broadway is a big part of it.”
Born said he is watching the markets and deciding when to open up on a month-to-month basis, but for right now, he is keeping his hotels closed.
For hotels in the area that rely heavily on tourists to fill their rooms, the announcement came as a blow to an industry already in a dire situation. New York City hotels ended the week of June 27 with an average occupancy of 42.4%, down from 43.6% the year before, according to hotel data firm STR. In recent years, average hotel occupancy for a New York City June has eclipsed 90%.
“[Broadway closing] is clearly not a positive for New York, the economy and the hotel industry,” LW Hospitality Advisors CEO Dan Lesser said.
STR is projecting New York hotels’ occupancy rate for the year to average between 42% and 43% for those hotels that remain open, Senior Vice President Jan Freitag said. The closing of cultural amenities like museums and Broadway will have a significant impact on the amount of visitors the city gets, he said.
“With all of that not accessible, New York City is just a bunch of skyscrapers … so people don’t have the impetus to come,” Freitag said.
Lodging research group STR predicts that, by the end of the year, the drop in demand will lead to 17% of New York City’s hotel rooms being taken off the market. Many other hotels will sell at discounts — or change ownership via foreclosure — rather than close altogether, Freitag said.
Hotels are already beginning to reckon with the pandemic’s fallout. The owners of The Mark — home to New York City’s most expensive hotel room — went into default this spring. The Times Square Edition, the 452-room hotel at 20 Times Square, shuttered permanently after opening last year.
While hotel industry officials say that the short-term future for tourism in New York City looks dismal, the hotel industry will remain strong in the long run.
Born said that he is encouraged by news that cruise companies reported an uptick in reservations a year out from now. This bodes well for the future of tourism in a post-coronavirus world, he said.
Bar and restaurant owner Scott Gerber, who recovered from COVID-19 earlier this year, said that hotel owners he has partnered with don’t expect relief from historically low occupancy rates this summer but are forecasting 20% to 30% occupancy in September and October followed by 50% to 70% occupancy by the holidays.
But Gerber, who owns several food and beverage operations in hotels, acknowledged how impossible making projections is at the moment — he had rehired much of his staff to come back to work Monday when the city was due to enter Phase 3, only to find out days before that indoor dining would be postponed indefinitely.
“No one was expecting any of this,” Gerber said.
As the streets around Broadway sit quiet — for once — the world is waiting for when New York City will feel like the Big Apple again.
“I think many folks are writing off 2020 and hoping for a reset come Jan. 1, so that’s the bad news,” Lesser said. “But the good news is that it will end at some point. ... There is so much pent-up demand out there, and there will be more by the end of the year.”