A Sixth Avenue lot just off Times Square has been home to a magazine building and a pop-up shopping court, and outlasted its owner’s decision to abandon plans for a luxury hotel there.

Last month, construction signs on its plywood fence announced what’s next: a 41-story hotel, due in 2029.

It’s one of the last hotel projects to win approval before the city made new ones far harder to build.

New York City’s hotel construction pipeline is about a third of what it was in 2020, according to an October report from the New York State Comptroller’s Office. The city's hotels have the highest occupancy in the country, and tourism is nearly back to pre-pandemic levels. New York will easily absorb what’s coming, industry figures say, and may soon run short.

Visitor numbers will likely top their 2019 record by 2028, if not next year, said Vijay Dandapani, president and CEO of the Hotel Association of New York City.

"At that point, we’re going to be under-hoteled, meaning there won’t be enough hotels," he said.

New York City’s hotels have had a strong year. Occupancy in most Manhattan submarkets has topped 80% so far in 2026, CoStar Group Director of Hospitality Market Analytics Didio Pequeno told Bisnow. Nationally, hotel occupancy was 66.4% in August, according to CoStar data.

The city has 24 hotel projects totaling 5,778 rooms in active development through 2028, according to New York City Tourism + Conventions, the city’s tourism marketing agency. That much new supply might strain other hotel markets, Pequeno said.

“Usually, that's a short-term shock to the system,” he said. “Over time, performance does pick up, especially in a place like New York, where demand and occupancy levels are so high.”

And demand is still growing. The city drew 65 million visitors last year, just shy of its 2019 record, and the agency expects that number to climb to 66.3 million this year.

The Sixth Avenue tower joins two larger hotel projects already rising nearby in Midtown.

Renderings released this month show a 41-story tower at 1146-1150 Sixth Ave., wrapped in reflective glass framed by copper-toned panels and designed by Stonehill Taylor. Permits issued in 2021 called for 310 rooms.

Fortuna Realty Group, the firm founded by Morris Moinian, bought the site, then home to the eight-story Pan American Magazine Building, for $39M in 2012, public records show. Moinian, the younger brother of Moinian Group founder Joseph Moinian, shelved the hotel plan in 2020 and tried to sell the property, according to the New York Post.

About 10 blocks north, at Broadway and West 54th Street, family-owned Spanish chain RIU Hotels & Resorts is building its third New York City hotel — a 54-story tower with 673 rooms and two 300-seat restaurants, due in 2027.

Extell Development sold the site to RIU for $172.8M in 2023, according to PincusCo, roughly $95M less than the $268M it paid in 2017 for the property and 360K SF of air rights, according to New York YIMBY. The tower is expected to top out this year, YIMBY reported.

Extell, meanwhile, is building its own hotel about eight blocks south. The Torch, at 740 Eighth Ave. between West 45th and 46th streets, had risen 40 stories as of September, The Real Deal reported.

The Gary Barnett-led firm is building a 1,800-key hotel an avenue west of the Times Square bow tie, according to The Real Deal, topped by an observation deck and a 260-foot drop ride.

Midtown hotels are well positioned to absorb the new rooms, Dandapani and Pequeno said. Occupancy in CoStar’s Midtown South submarket reached 86% year-to-date through August, according to CoStar data provided to Bisnow.

“Midtown is the center of attraction for so many reasons, for both tourism as well as for business travel,” Dandapani said of the three projects. “They'll do well.”

City hotels set a record average daily rate of $333.71 last year, according to the comptroller’s report, and revenue per available room hit $280.71. Both topped 2019 levels in nominal terms but fell short once adjusted for inflation.

“The rates have been really good,” Dandapani said, though he noted that, adjusted for inflation, RevPAR beat 2019 levels in only four months last year. “But let’s remember, the key point is this is the nominal rate, not the real rate.”

New hotel development has slowed in large part because of rules the city has adopted since 2021, Dandapani and Pequeno said.

Pequeno added that high construction costs and labor shortages tied to stricter federal immigration enforcement are also weighing on builders nationwide.

Since December 2021, nearly every new hotel in the city has needed a special permit from the City Planning Commission, a discretionary approval that runs through the city’s full public land-use review. Projects already in the works were grandfathered.

Only two new hotel projects have won special permits since then, Dandapani said: The Nell New York, a 134-key hotel at Rockefeller Center expected to open in 2027, and a 1,000-key hotel planned for Willets Point as part of Steve Cohen and Hard Rock’s casino complex.

Two other city policies have reshaped the market since then: one that helps existing hotels and one that adds to their costs.

The first is Local Law 18, which took effect in 2023 and all but eliminated short-term rentals like Airbnb, removing a major competitor for visitors’ dollars.

The second, the Safe Hotels Act passed in 2024, requires hotels to hold operating licenses and bars those with more than 100 rooms from using subcontractors for core jobs like housekeeping and front desk. That raises costs, especially for nonunion hotels, which make up about three-quarters of the city’s hotels, according to the comptroller’s report.

High costs and tighter rules pushed some longtime owners to sell at a discount last year, while the same limits on new supply drew buyers betting on the city’s tourism. The 271-room New York Edition, for one, sold for $235M, 30% less than its owner paid in 2015.

In a market this regulated and short on new supply, hoteliers should hold on to their pricing power, Pequeno and Dandapani said.

That’s why developers still want in, even if few can get through.

“Manhattan is still a hotbed for development because hotel performance is still so strong,” Pequeno said.