Manhattan Lodging Index: Q4 2019

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Manhattan Lodging Overview

Revenue per available room (“RevPAR”) fell 4.4 percent year-over-year in the fourth quarter mainly due to a decline in pricing power across the board at Manhattan hotels. Despite persistent growth in lodging demand, an outsized increase in new hotel rooms kept a lid on hotel occupancy during the fourth quarter.

For the year, Manhattan RevPAR fell 3.9 percent, with average daily room rate (“ADR”) and occupancy posting declines of 2.8 percent and 1.2 percent, respectively.

“Just over 3,800 new hotel rooms were added to the Manhattan lodging market last year. This, coupled with an increasing percentage of Manhattan’s total lodging demand coming from the more price-sensitive leisure customer, is continuing to impact hotels’ abilities to drive meaningful increases in room rates.”

-Warren Marr, US Hospitality & Leisure Managing Director

Upscale properties exhibited the most notable decline in RevPAR during the fourth quarter.

Decreasing by 6.2 percent from prior-year levels, Upscale RevPAR performance was largely driven by a decline in ADR of 5.5 percent. For Upper Upscale hotel properties, where occupancy fell by 0.5 percent, Q4 RevPAR was further impaired by a decline in ADR of 3.1 percent.

While Luxury and Upper Midscale properties posted the smallest declines in RevPAR of 3.4 percent and 3.3 percent, respectively, positive contributions from occupancy of 0.3 and 0.6 percent were offset by declines in ADR of 3.7 and 3.8 percent, respectively.

During the fourth quarter, all five Manhattan neighborhoods experienced year-over-year declines in RevPAR. While ADR fell across the board, the Midtown East submarket posted the largest ADR-driven decline in RevPAR of 8.6 percent.

About PwC’s Manhattan lodging index

PwC’s Manhattan lodging index provides updates on Manhattan’s lodging market, widely used by lodging brands, developers, and owners. The publication includes:

  • A recap of the operating performance of hotels and sub-market trends
  • Discussion of the overall drivers of operating performance
  • The transactions environment
  • The supply pipeline

How PwC can help

Contact us

Scott Berman

Scott Berman

US Hospitality & Leisure Practice Leader, PwC US

Warren Marr

Warren Marr

US Hospitality & Leisure Managing Director, PwC US

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