The city’s hotel industry didn’t roll out the welcome mat thanks to a sunny forecast from CBRE that claimed the pandemic-hit inns were doing fine.
The Hotel Association of New York City president and CEO Vijay Dandapani cast a shadow over the real estate company’s rosy forecast as his organization announced a major cut in the city’s hotel occupancy tax from 5.875 percent to 2.875 percent, as well as lowering property taxes. for the lobby.
If hotels are in better shape, lawmakers are likely to be less receptive to the pitch, as recent disappointing reports have suggested. But as with most data comparisons, there is some truth in both approaches.
Dandapani said the CBRE’s survey, which The Post reported on Tuesday, was not grounded in predicting the return of pre-pandemic occupancy and revenue by 2024.
“We are the cheerleaders for the city, but there is a difference between expectation and expectation,” Dandapani said.
The optimistic prediction was written by Dan Hanrahan, CBRE’s Senior Vice President of Hotels Advisory for the Northeast. Dandapani said that Hanrahan’s forecast that revPAR — or revenue per available room, a key industry metric — would “jump back to 2019 numbers” this year, was “very unlikely.”
If that happens, “we can all buy a drink at Christmas,” Dandapani stammers.
CBRE based its encouraging forecast on data for the first quarter of this year, which saw an increase in occupancy levels, room rates and Revpar.
The Hotel Association’s own data for the first five months of 2022 shows the average revPAR for this year, though rising from the 2021 average, is still below 2019 – $155 compared to $184 before the virus hit.
“To catch up, the revPAR would have to be significantly higher than the current $155 for the rest of the year. Crossing the gap is not impossible, but it is impossible,” Dandapani said.
Furthermore, he added that revPar has different meanings in 2019 and in 2022, noting that city hotel rooms have shrunk from about 122,000 in 2019 to nearly 100,000 today.
Luxury-class inns like Baccarat, St. Regis, Pierre and Four Seasons Downtown are outperforming affordable properties, he said.
But many hotels at all price points remain closed—from the top-tier Four Seasons on East 57th Street to the mid-market Marriott Eastside on Lexington Avenue, to budget accommodations in Chelsea and the Far West Side.
“Most elected officials are insisting on converting closed hotels into accommodation,” Dandapani said. “This means, however, that there are a lot of closed hotels”—and the damage hasn’t been fully offset by recent openings like the Hard Rock and Riu Hotels near Times Square.
Other troubling “headwinds” include the slow return of international business travel and an almost complete loss of visitors from China and Brazil.
But Dandapani acknowledged at least one promising vital sign. Asked how much guests are paying per room today compared to pre-pandemic days, he said last week’s average cost across all hotel classes was $263 – “within five percent, compared to 2019’s striking distance.” Inside,” he said.
