During the third quarter of 2019, revenue per available room (“RevPAR”) fell 3.1 percent, primarily due to declines in average daily room rate (“ADR”). Growth in lodging demand did not keep up with a supply increase of 3.1 percent, resulting in occupancy falling 0.5 percent
“Manhattan hotels have seen RevPAR grow in only one of the first nine months of this year. Investor concerns over a possible downturn are rising, business spending is decelerating, and political uncertainty is increasing with the coming presidential election. It remains to be seen whether Manhattan hotels will benefit in the fourth quarter from the historically strong retail traffic that visits the city between Thanksgiving and Christmas”.
Decreasing by 3.7 percent from prior-year levels, Luxury RevPAR was largely driven by a decline in ADR of 2.7 percent. For Upscale hotel properties, where occupancy fell by 0.8 percent, Q3 RevPAR was further impaired by a decline in ADR of 2.6 percent. Upper Midscale hotels experienced a minimal decline in occupancy 0.1 percent, with ADR down 2.2 percent, leading to an overall decrease in RevPAR of 2.3 percent. Of the four hotel classes tracked, Upper Upscale hotels posted the smallest decline in RevPAR, driven by a decrease in ADR of 1.9 percent partially offset by growth in occupancy of 0.5 percent.
PwC’s Manhattan lodging index provides updates on Manhattan’s lodging market, widely used by lodging brands, developers, and owners. The publication includes:
US Hospitality & Leisure Practice Leader, PwC US
US Hospitality & Leisure Managing Director, PwC US