New York City hotels won’t be able to party like it’s 2019 until 2025.
Occupancy rates in the city won’t recover to pre-pandemic levels until halfway through the decade, according to a new CBRE study reported by the Commercial Observer.
The commercial brokerage firm expects revenue per available room to hit 2019 levels by 2024, with occupancy rates reaching 74 percent in 2022 and 86 percent in 2025.
CBRE’s report predicts an average occupancy of 43 percent for hotels through June, an increase from last year’s 35 percent.
The vaccination rollout and passage of $1.9 trillion of Covid relief will provide hotel owners with some reprieve in the meantime, according to CBRE senior hotel economist Bram Gallagher.
“New York City is now starting to experience an economic rebound,” said CBRE’s Mark VanStekelenburg. A full reopening of businesses is set for July 1 and this week Mayor Bill de Blasio announced a $30 million ad campaign to lure tourists back.
But predicting how many hotels will be built in the coming years is tricky. The New York Times this week reported that de Blasio’s own planning chief warned him that his plan to send all new hotel construction through a political gauntlet, would curb development, cost the city tax revenue and slow the return of tourism to the city.
The largest pandemic deal for a distressed hotel asset came early this month when Isaac Hera’s Yellowstone Real Estate Investments bought the 600-room Watson Hotel at 440 West 57th Street.
Hotel occupancy in the city hit its highest level — 47 percent — since last June during the week ending March 13. But that number does not take into account the many hotels that have closed — some permanently.
[CO] — Orion Jones