During the second quarter of 2019, revenue per available room (“RevPAR”) fell 2.2 percent, as both average daily room rate (“ADR”) and occupancy declined. Demand did not keep up with a growth in lodging supply of 3.0 percent, with occupancy falling 0.9 percent. Six months in, RevPAR across the market was down 4.3 percent through June, with declines in occupancy and ADR contributing equally to this drop.
“Continued increases in supply, coupled with pressures on demand stemming from continued trade tensions and slowing economic growth, are having a profound impact on Manhattan hotels. In addition, inbound leisure travel from China was also impacted due to the devaluation of the yuan.”
Across all Manhattan hotel classes, Upper Upscale properties exhibited the most notable decline in RevPAR during the second quarter. Decreasing by 2.7 percent from prior-year levels,
Upper Upscale RevPAR was largely driven by a decline in ADR of 2.0 percent. For Upscale hotel properties, where occupancy fell by 0.5 percent, Q2 RevPAR was further impaired by a decline in ADR of 1.1 percent. Luxury hotels saw the only gains in ADR, up 0.5 percent, with declines in occupancy driving a decrease in RevPAR of 2.0 percent for the quarter. Of the four hotel classes tracked, Upper Midscale hotels posted the smallest decline in RevPAR, with occupancy and ADR each declining 0.4 percent.
Source: PwC, based on STR data
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