New York’s hotel occupancy rate faltered slightly from its October high as rooms used to shelter migrants begin to empty out.
The hotel occupancy rate was 85.6% in November, according to the latest data released Friday from the city’s Economic Development Corporation, just under a point less than the 85.7% it was at during the same month in 2019, but behind the post-pandemic high the industry boasted in October with a rate of 91.1%.
Experts say that the decline in the weeks following Donald Trump’s reelection to the White House, and on the heels of his repeated campaign promises to shut down the border and engage in the mass deportation of migrants — many of whom are living throughout the city’s 121,000 hotel rooms — was somewhat expected.
“I think there are a few larger dynamics at play, including the reduction of hotels being used for sheltering migrants and the subsequent transition that’s occurring back to hotel operations,” Ronald Cohen, a broker who handles hotel deals at Midtown-based real estate agency Besen Partners, told Crain’s Friday.
Cohen also suggested that an increase in pricing may have “cooled demand.” The average daily rate for rooms was $310.40 as of last month, Crain’s reported, up about 6.1% year over year, according to commercial real estate database CoStar.
Experts warned in early November that a second Trump administration could curtail the industry’s rebound from the pandemic. That month, city officials began winding down contracts with two hotels housing migrants — Hotel Merit in Hell’s Kitchen and a Quality Inn in Springfield Gardens, Queens — as the number of asylum seekers arriving in the five boroughs was already down 14% since last January and even more were leaving the shelter system, Crain’s reported at the time. It’s estimated that the city has spent more than $1 billion on contracts with hotels to secure as many as 14,000 rooms.
“He says a lot of rhetoric, and some of it doesn’t come to pass,” Vijay Dandapani, CEO of the Hotel Association of New York City, said in November. “Some does.”
Still, Dandapani doesn’t see the shift as a problem for the industry, but rather as a potential way to rebalance supply and demand. He again highlighted on Friday what he perceives as a minuscule difference between this November’s occupancy rate and the “benchmark year” in 2019.
Cohen similarly didn’t express concern, pointing out that the figures don’t yet reflect the tourism of the holiday season. It’s unclear at this time how many visited the city this season, but Mayor Eric Adams touted last week that nearly 65 million people visited in 2024 — the second-highest figure in the city’s history and a 3.5% increase from 2023.
How else is the city’s pandemic recovery faring? Here are other key takeaways from the report:
The city lost 800 private sector jobs in November, still 2.4% than there were in 2019. The unemployment rate held steady month-over-month at 5.4%, however, the Black unemployment rate for the last quarter of the year increased from 7.3% to 8.5%. The Latinx unemployment rate was 6.7%.The Real Estate Board of New York’s overall office visitation rate increased to 74% in October, up just 2% from September.Kastle Systems, on the other hand, which also tracks office occupancy, puts that number closer to 53%.
