New York Hotels are Poised to Make a Brand New Start

According to recent STR data, the city's hotels hit 50.4% occupancy for the week of March 21, which was among one of its highest weekly averages since late last June. The week prior, on Saturday, March 20, occupancy had surged to 65.4%.

But there is an important caveat. Even though data for March 21 to 27 remains a far cry from the average occupancy level of 83.8% for the comparable week in 2019 -- and a seemingly giant leap forward from 14.2% for the comparable week in 2020, at the outset of the pandemic -- the numbers are calculated from a much-reduced base of inventory.

"There's definitely light at the end of the tunnel," said Jan Freitag, STR's senior vice president of lodging insights. "Not just from looking at New York City occupancy data but also from the macro-perspective, in terms of [Covid vaccine] shots being administered each day, GDP growth being revised upward, unemployment coming down. All of this bodes well for travel in general and for New York City specifically."

But, Freitag acknowledged, "we do have this little wrinkle, because a lot of rooms in the city are still closed." STR estimates that around 30% of New York's total room supply remains offline.

When factoring in those temporary room closures due to the pandemic, STR reports that New York's total-room-inventory occupancy for the week of March 14 was at a more sobering 32.2%.

"There are 226 hotels that are closed, either temporarily or permanently," said Vijay Dandapani, president and CEO of the Hotel Association of New York City. "Thirty-odd hotels have presumably closed permanently, and 139 hotels are now given entirely to the homeless-shelter business. So, you've got somewhere around 400 out of the 700 pre-Covid hotels that are now out of the mix. The inventory is really skewed."

Still, as occupancy for the city's open properties ticks upward, some hotels that have been long shuttered are restarting operations. Most recently, Manhattan's Mandarin Oriental New York and Park Hyatt New York both reopened on April 1.