PwC: New York Hotel Recovery Continues Slowly

NEW YORK—New York hotel recovery is continuing this year, although at a slow pace, according to PricewaterhouseCoopers’ recent mid-year review and outlook report for the hospitality industry for Manhattan in 2002. It has been a difficult year for all Manhattan hoteliers following the Sept. 11 terrorist attacks of 2001. As a result, the occupancy rate was 73.8% for the period between January and June 2002, the lowest since 1995, according to the report. Further, room rates are at 1998 levels, the report states. For 2002 overall, PwC forecasts that Manhattan hotels will achieve an occupancy level of 74%, up just one point from 2001. While this is slight increase from last year, room rates have not rebounded at all. Specifically, for June year-to-date 2002, the average daily rate for all Manhattan hotels was $181.41, an 11% drop from the year before. PwC said that although some hotels have made efforts to raise rates this fall, it will not be enough to compensate for the decline. But New York is making a comeback, albeit a slow one. PwC is forecasting some improvement in occupancy and room rates for 2003. “Overall, our outlook for 2003 is for the market to be relatively even with 2002’s performance levels with the exception that the first quarter of 2003 should be better than this year,” the report states. Also, PwC states economy brands have made significant headway in the city. The opening of the Red Roof Inn in 2000 was followed by others including Best Western, Hampton Inn, Super 8, Comfort Inn and Sheraton Four Points.