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Friday, March 27, 2009

Hotel Rates Plummeting in the Big Apple

New York may still be the most expensive place in the country to stay overnight, but it's getting cheaper. Hotel prices in the Big Apple have been consistently dropping for the last six months. According to PKF Consulting, average room rates in Manhattan dropped 11.5 percent in January from the year before, while occupancy for the same month was down 16 percent. Anecdotal evidence suggests rates and occupancy are down for February and March as well.

With business travel slowing, international visitors staying away, and 38 new properties opening in Manhattan this year, the downward spiral is likely to continue.

Lodging Development Group's 2009 Manhattan Lodging Development Report notes that there are "17 properties comprising 3,074 rooms that are now in permitting or the final states of entitlement." This new supply is in addition to the 12 properties with 1,732 rooms that came on the market in 2008. Interestingly, the bulk of those hotels are midprice and limited-service brands like Hampton Inns & Suites, Four Points by Sheraton, and Hilton Garden Inn.

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