As the U.S. continues to recover from the events of the last two years, New York City tourism is returning to pre-pandemic levels as both international and business travel to the area has surged over the past few months. In addition, the reopening of numerous hotels throughout the city, as well as the return of Broadway shows, has also stoked the market, which bodes well for the future health of the New York City hospitality sector.
These are some of the major takeaways from the New York City Q2 2022 hospitality market report, released by boutique real estate capital markets advisor Hodges Ward Elliott (HWE).
Major highlights from the report include the following:
- Return of international travel: In the biggest overhaul to the U.S. travel policy since the onset of the COVID-19 pandemic, the U.S. opened its borders to all air passengers from foreign countries beginning on June 12. According to Expedia’s Q1 2022 Travel Recovery Trend Report, New York is one of the top 10 cities in total bookings across all regions (North America; Latin America; Europe, Middle East & Africa; Asia-Pacific), indicating strong domestic and international travel demand.
- Business travel resurgence: Business and leisure travel have historically displayed a 20/80 split in New York City. Although the business travel share of the split dropped to 12% in 2021, NYC & Company projects this segment to reach 16% this year with more than 9 million business travelers, more than 2.3 times in 2021.
- Broadway goes curtains up: Since the reopening of Broadway, theatergoers have returned in droves with an average theatre capacity of 81.8%, more than 7.8 million attendees and more than $989 million in grosses season-to-date.
- Luxury rates continue to soar: The transient luxury segment in Manhattan has proven to be incredibly resilient through Q2, experiencing a full recovery and then some, exceeding 2019 rates by 31.9%. The pandemic has shown that luxury room product in Manhattan is price inelastic and it is evident more than ever the luxury rate ceiling has yet to be seen.
- Hotel reopenings: Since the mass closure in April 2020, Manhattan and Brooklyn have seen 185 hotels (36,328 keys) open through June. Pre-COVID, the lodging market in Manhattan and Brooklyn totaled 535 hotels (111,543 keys) and as of June, the two boroughs boast 541 open hotels (105,230 keys, 94% of pre-COVID inventory).