Fewer travelers checked in last quarter at the New York Hilton Midtown, one of the city’s biggest hotels, and the property’s owner could turn unprofitable this year due to a decline in overseas guests.
“We’ve got tremendous uncertainty now for all the reasons we all know,” Thomas Baltimore, CEO of Park Hotels & Resorts, said on a conference call Monday.
Occupancy at the Hilton came in at 71% in the first quarter, down from 75% a year ago, while revenue per available room ticked down 0.3%, to $190. The 1,878-room hotel at Sixth Avenue and West 53rd Street is the site of where a UnitedHealth executive was assassinated in December.
Baltimore said the hotel has seen “a little bit of a falloff” in Canadian guests. But April revenue per available room was 17% ahead of the prior-year period, thanks in part to the late Easter holiday. The CEO said he remains “cautiously optimistic” about the New York market because the U.S. economy remains strong.
Baltimore said trade-war tensions have caused booking windows to “narrow significantly” and management warned 2025 is looking worse than predicted three months ago. Park Hotels owns 37 convention-center and resort hotels across the country holding 22,000 rooms.
The Hilton Midtown is Manhattan’s biggest hotel after the 1,971-room Marriott Marquis Times Square.
Altogether the city has 135,000 hotel rooms, second only to Las Vegas and 60,000 more than only 20 years ago. Even though average nightly rates exceed $300, the average hotels’ occupancy rate of 85% is the highest in the country, according to the New York City Comptroller’s office, well above the nationwide average of 63%. Nearly 47,000 New Yorkers work in accomodation, 12% below 2019 levels, the comptroller’s office said.
Park Hotels expects results this year could range from an $8 million net loss to $52 million in net earnings, down from its February projection of $87 million to $147 million in net income. It said operating profit margins would come in between 9.5% and 11.5%, down from an earlier projected range of 13.0% to 14.9%.
The hotelier attributed much of the anticipated decline in profitability to a slowdown in Hawaii, where it owns 3,500 rooms. Japanese travelers to those islands have declined by 6% and Canadians by 1%, Baltimore said.
Park Hotels’ stock dropped by 10 cents in midday trading Monday, to about $10.20 a share. It has fallen by 26% this year.
