In the past two weeks, several people I know have complained to me about therates in New York City. (As though I have some control over them.) If they chose to do so, all of these folks could afford the $400-and-above rates they were quoted for less-than-five-star hotels. Yet they all said that because of the hotel prices, they're passing on trips to Manhattan for the near future.
Late last week, this little drama achieved clarity to me as I got a report from PKF Consulting on rates, occupancies and RevPARs for NYC. According to the report, the average daily rate for Manhattan hotels was $340 in September, up a whopping 11 percent over the same month last year. And rates for the first nine months of the year climbed by nearly 13 percent to an average of $276.
As Manhattan passes the $300 ADR mark (and some neighborhoods approach the $400 barrier), questions come to mind: Is the city pricing itself out of business? At what price will most potential travelers like my friends just say no to traveling to the Big Apple? Are the high rates a function of greed, or operating costs, or real estate values, or other factors?
I don't have the answers to these dilemmas, but this weekend at the AH&LA Leadership Forum at the Javits Center inI'm moderating a panel of NYC operators, and I plan to get their opinions on the matter. Of course, at least so far, demand remains very strong in New York. Occupancy for the year through September is 86 percent, up more than a percentage point over last year. And RevPAR, which is more bankable than either rate or occupancy, is up a phenomenal 14 percent.