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After a strong first quarter, brokerage CBRE has improved its hotel outlook, with revenue per available room now expected to increase throughout this year.
CBRE is projecting a gain in RevPAR — the indicator most closely linked to hotel success — of 1.8% in New York City this year, thanks largely to increased daily rates, the brokerage wrote in a report. Those rates are also expected to jump 1.5% this year, following a three-year stretch of declines.
Meanwhile, occupancy levels are trending upward, projected to hit nearly 87% this year. The national average is 62%.
“New York City remains one of the healthiest hotel markets in the country, given its stature as a world destination and the constant demand for traditional hotel rooms that comes with that distinction,” CBRE Hotels Managing Director Mark VanStekelenburg said in a statement. “RevPAR in the first quarter grew the fastest in five years.”
It is good news for the industry that has seen something of construction boom in recent years. More than 5,000 NYC hotel rooms opened last year, according to hospitality research firm HVS.
The hotel supply is continuing to rise, with increases of 5% expected in 2018 and 2019.
To put that in perspective, during the Great Recession, NYC had approximately 66,000 hotel rooms. By the end of 2018, it will be home to more than 100,000.
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