According to data from STR, the New York, New
York, hotel market reported negative results in each of the three
key performance measurements for the first quarter of 2015.
In year-on-year comparisons, occupancy in New
York City decreased 0.2% to 75.2%; ADR fell 4.1% to US$204.18; and
RevPAR dropped 4.3% to US$153.63.
The decline in occupancy came as first-quarter
room supply (+3.1%) outpaced demand in the market (+2.9%) in
As expected, overall performance for the market
was down when matched with prior year comparisons, which included
hosting Super Bowl XLIV in February 2014. Inclement weather in the
Northeast also slowed travel during the early months of 2015.
All STR Chain Scale segments in New York City, including
Independents, experienced ADR declines for the first quarter of
2015. The Upper Upscale segment, which accounts for nearly one-quarter of market room supply in New York City, remains
US$33.00 below its 12-month trailing ADR peak (US$313.62) reached
in September 2008.
In 2014, New York City saw a 5.5%
year-on-year increase in supply, but demand grew at a higher rate
of 6.0%. As a result, occupancy in New York City rose to 84.8%—the
highest annual occupancy STR has ever recorded for the market,
according to Bobby Bowers, STR’s senior VP for operations.
Despite the record occupancy, ADR for the year increased 1.8% to
US$263.45. For three consecutive years, New York City has failed
to produce ADR growth consistent with the market’s long-term
annual average of +3.7%.
“It’s hard to determine what’s
holding back ADR growth in New York City,” Bowers said.
“Obviously, annualized room supply growth is significantly above
normal, but demand growth has been even stronger, and occupancy
levels are near all-time highs. Revenue management decisions made
at the hotel level are reflected in the market’s performance—we’ll
see how those decisions play out in the coming months.”
expects New York City supply growth to peak in 2015 but continue
to increase well above the long-term average at more than 5.0% in
2016. The current forecast also calls for occupancy declines in
2015 and 2016, with below-trend ADR growth. Longer term, STR says
expects lower supply increases after 2016 and a return to
near-trend ADR growth.
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