New York Hospitality Investment Forecast
New York's Recovery Contingent on the
Return of International and Business Travel
Live events provide a boost to hotel occupancy. The return of major gatherings without capacity restrictions like Broadway musicals, the U.S. Open and the Governors Ball Music Festival elevated overnight stays across the region. Occupancy rose by 1,400 basis points last year, although the rate still remains well below the state's pre-pandemic mark entering 2022. The health crisis decimated tourism and business travel, significantly impacting performance inside New York City. As a result, many hotels shut down, with roughly 10,000 rooms still temporarily closed as of December 2021. This led to steep job losses, with total employment in the leisure and hospitality sector down 30 percent from the metro's pre-pandemic level entering 2022. Despite the recent headwinds, developers are bullish on future demand, with over 16,000 rooms underway across the state. The easing of pandemic restrictions on businesses and foreign tourism will boost visitation this year, supporting a further rise in hospitality fundamentals; performance metrics, however, will likely trail pre-pandemic rates until international travel returns to normal levels and hotel staffs can be bolstered.