
New York's hotel scene is witnessing a mild shuffle in occupancy rates, as shown in recent data. According to Friday's release by the city's Economic Development Corporation, covered by Crain's New York Business, hotel occupancy in November registered at 85.6%, a slight reduction from the 91.1% pinnacle observed in October. This change marks a period of transition, with migrants beginning to vacate accommodations once designated as temporary shelters.
Fueling the decline in hotel use for migrant housing, city officials have started the process of winding down contracts with certain hotels, one of which is Hotel Merit in Hell's Kitchen and a Quality Inn in Springfield Gardens, Queens. Migrant arrivals have also decreased by 14% since last January, and many have been moving out of the shelter system, as reported by The New York Post. After Donald Trump's re-election, his campaign proclamations to tighten border control and enhance deportation efforts have cast a shadow over the city's migrant shelter strategy.
As rooms revert to regular hotel use, the average daily rate has climbed to $310.40, a 6.1% year-over-year increase according to CoStar data. This increase might have contributed to dampening demand, suggested Ronald Cohen, a hotel deals broker at Besen Partners, in a statement obtained by Crain's New York Business. Nonetheless, the sector seems to be absorbing the changes without much distress. Vijay Dandapani, CEO of the Hotel Association of New York City, regarded the occupancy rate drop as nominal when compared to 2019, which is considered a "benchmark year."
Looking beyond just the hotel industry, New York's broader economic landscape shows mixed indicators. Crain's New York Business informs there was a slight dip in private sector employment with 800 jobs lost in November, while office visitation rates inched up to 74% in October, according to The Real Estate Board of New York. Kastle Systems, a firm also tracking office occupancy, offers a more conservative estimate at around 53%. Unemployment rates remain steady, though disparities persist — with the Black unemployment rate seeing an uptick from 7.3% to 8.5% in the last quarter of the year.
A consequential development in the city's approach to migrant housing is the cessation of the usage of two hotels as emergency shelters. Detailed by The New York Post, the Hotel Merit and the Quality Inn JFK Airport are among the first to be phased out. Mayor Eric Adams' administration, responding to a slowdown in migrant arrivals and successful resettlement efforts, signaled a consolidation of operations with over 170,000 migrants helped to move out of shelters and onto the next step.