The Manhattan market has been experiencing a protracted post-pandemic occupancy restoration, regardless of sturdy ADR beneficial properties. Though legislative and provide modifications ought to bolster this restoration, latest geopolitical elements and the tariffs and coverage modifications enacted by the brand new federal administration are anticipated to have an effect on short-term lodge market traits. Our present demand forecast exhibits a full restoration past 2019 ranges by 2027/28.
The Manhattan market remained resilient through the decade ending 2019 however was severely affected by the COVID-19 pandemic. The final 4 years have been a interval of continued occupancy restoration for the market, coupled with sturdy beneficial properties in common every day price (ADR) pushed partially by excessive inflationary ranges. In 2023, the market ADR surpassed the 2019 stage by over 20%. ADR then peaked in 2024, exceeding the 2019 stage by over 26%. Occupancy continued to lag in 2024, ending within the mid-80s. Nonetheless, substantial ADR will increase bolstered the market’s 2023 RevPAR roughly 14% above the 2019 stage and its 2024 RevPAR roughly 24% above the 2019 stage.
The total market restoration would require the entire return of worldwide journey, assembly and group enterprise, and business demand. The present geopolitical elements and just lately imposed tariffs, nonetheless, have created a robust stage of uncertainty concerning worldwide visitation to the US. The unpredictable timing and nature of coverage choices and the rhetoric of the brand new administration contribute to the uncertainty of inbound worldwide journey, making it tough to offer a near-term forecast.
In early Could 2025, New York Metropolis Tourism + Conventions revised its projection of 2025 visitation to 61.4 million, down from the February 2025 forecast of 64.4 million. Nevertheless, inflationary ranges might enhance from the just lately imposed tariffs, which can not directly enhance home journey. Some customers might think about less expensive home journeys to handle discretionary revenue, which might offset a portion of any loss in worldwide room-night demand. A resumed pattern of inflation will increase can also have an effect on ADR development.
Resorts as Non permanent Shelter Services
Most resorts that closed briefly in 2020 reopened following essentially the most vital results of the pandemic. Nevertheless, some have completely closed, others are working as momentary shelters for unhoused people or migrants/asylum seekers, and nonetheless others have been or could also be transformed to alternate makes use of. Previous to the pandemic, a number of the outer-borough resorts have been already contracting guestrooms with the New York Metropolis Division of Homeless Companies (NYC DHS) to offer momentary shelter amenities for residents experiencing homelessness. Further lodging amenities have been briefly utilized as shelters throughout 2020 and 2021 to satisfy social-distance necessities through the peak of the pandemic.
Intensifying the housing dilemma, an inflow of migrants and asylum seekers (a lot of whom have been transported instantly from different states) started to reach in New York Metropolis within the second quarter of 2022; such influxes grew to become an everyday incidence via mid-year 2024. Greater than 210,000 migrants and asylum seekers arrived within the metropolis throughout this era. A number of dozen resorts inside the 5 boroughs have been utilized as momentary shelters as metropolis officers tried to handle the disaster surrounding unhoused residents and the inflow of migrants and asylum seekers.
Given the decreased arrivals of migrants and asylum seekers and the restricted funding, metropolis officers have been closing the momentary shelters in waves since mid-year 2024. Quite a few resorts have reopened to the general public following the shelter closures. Not less than a dozen extra lodging amenities are slated to shut as momentary shelters by the tip of June 2025, together with the Roosevelt Lodge in Midtown Manhattan, which served as the principle consumption middle and Humanitarian Emergency Response and Aid Middle for migrants and asylum seekers. Whereas most of those properties are anticipated to reopen to the general public as resorts, the Roosevelt Lodge is anticipated to be demolished to make room for a large-scale improvement. Moreover, most of the resorts at the moment working as momentary shelters, in addition to those who have remained closed with unsure reopening dates, are older belongings which might be in honest to good situation, and plenty of have vital obsolescence drawbacks. As such, we anticipate that over 50% of these resorts have a excessive chance of both closing completely or being transformed to a different use over the subsequent a number of years. In some circumstances, the usage of resorts to shelter New York Metropolis’s unhoused inhabitants might turn into a everlasting answer to town’s reasonably priced housing disaster.
Native Regulation 18
Native Regulation 18, generally known as the Quick-Time period Rental Registration Regulation, was adopted on January 9, 2022, requiring all short-term-rental hosts to register with the Mayor’s Workplace of Particular Enforcement (OSE). Native Regulation 18 prohibits reserving platforms (equivalent to Airbnb, Vrbo, and Resorts.com) from processing transactions for short-term leases that aren’t registered with the OSE. On September 5, 2023, the OSE commenced the preliminary part of Native Regulation 18 enforcement to make sure that short-term-rental hosts are utilizing town’s verification system persistently and accurately. Given the tight restrictions, a big portion of the short-term leases in New York Metropolis will not be permitted to function. Resorts have reportedly been absorbing a portion of this room-night demand. Lodge homeowners and operators out there proceed to fastidiously observe lodge demand traits for modifications that develop in response to Native Regulation 18; nonetheless, a while is required for these traits to evolve.
There was continued opposition to Native Regulation 18 from metropolis residents, because the short-term rental restrictions have had damaging monetary penalties for householders who depend on short-term leases for added revenue. On November 13, 2024, a couple of Metropolis Council members introduced Intro. 1107 that might grant some short-term-rental flexibility for homeowners of one- and two-family properties. The proposed Intro. 1107 has full help from the Restore Householders Autonomy & Rights group, which includes a number of hundred householders and has been pushing for modifications to Native Regulation 18. An amended Intro. 1107-A was launched on February 3, 2025. Tenant advocates, lodge trade members, and the Lodge Trades Council oppose the proposed Intro. 1107 and don’t help the amended Intro. 1107-A. No ultimate choice has been made but concerning the amended Intro. 1107-A. Native Regulation 97 Native Regulation 97 was handed in April 2019 as a part of the Local weather Mobilization Act, which requires that almost all buildings higher than 25,000 gross sq. toes should meet new energy-efficiency and greenhouse gas-emissions requirements as of 2024, cut back emissions by 40% as of 2030, and cut back emissions by 100% as of 2050. Many property homeowners and operators have reported that their lodge buildings meet the 2024 and 2030 necessities.
Beginning on July 1, 2025, penalties can be issued for both non-compliance with the necessities or non-reporting. Thus, homeowners of older resorts should bear in mind the price of both making the required upgrades or remitting penalty fines. Whereas Native Regulation 97 doesn’t instantly have an effect on Manhattan guestroom stock, these potential prices, together with the related larger improvement prices and different bills (e.g., larger property and legal responsibility insurance coverage premiums), should be thought-about by lodge builders, lodge possession entities, and lodge operators.
Protected Resorts Act (Invoice Int. 991)—Efficient Could 3, 2025
In July 2024, the New York Metropolis Council launched the proposed invoice Int. 991-2024, which is called the “Protected Resorts Act.” The proposed invoice underwent a couple of revised variations between August and October 2024 following evaluation and discussions between the Metropolis Council, Lodge and Gaming Trades Council, and Defend NYC Tourism Coalition. A ultimate model of the proposed invoice was signed into regulation on November 4, 2024, and the Protected Resorts Act went into impact on Could 3, 2025.
The regulation consists of quite a few service and security necessities, which many resorts already comply with as a part of their customary working procedures. The next are the principle new rules:
- All resorts in New York Metropolis are required to acquire a lodge license, which can be legitimate for a two-year time period, for the operation of the lodge. The lodge operator should acquire a lodge license renewal each two years thereafter.
- All resorts in New York Metropolis (no matter guestroom rely) should preserve steady entrance desk protection throughout operational hours. As such, not less than one employees member should present entrance desk providers throughout in a single day durations.
- All resorts in New York Metropolis with 100 or extra guestrooms can’t subcontract “core lodge” positions and should instantly make use of these employees members. “Core lodge” positions are outlined as entrance desk, housekeeping, and entrance service (e.g., home individual, bell individual, door individual).
- This requirement doesn’t apply to resorts with lower than 100 guestrooms.
- Subcontractor staffing contracts that have been executed previous to the regulation’s Could 3, 2025, efficient date might stay in impact if the contracts present for termination by a sure date.
- A lodge proprietor needn’t instantly make use of core staff if the proprietor retains a single lodge operator to handle all lodge operations involving core staff, wherein case the lodge operator should be the direct employer of the core staff.
- All resorts in New York Metropolis with greater than 400 guestrooms (categorized as “massive resorts”) should have not less than one safety guard onsite throughout all working hours.
- No resorts in New York Metropolis, except airport resorts, might supply guestroom bookings for lower than 4 hours.
The lodge license utility has been on-line since not less than April 2025, and a big portion of market resorts have reportedly submitted the license utility. Lodge market members are totally observing the whole course of as the entire rules are applied.
NYC Citywide Resorts Textual content Modification
In December 2018, the Metropolis Council adopted a textual content modification to the M1 zoning district rules, making a requirement for a special-use allow for brand new lodge developments in M1 zoning districts. On December 9, 2021, the Metropolis Council adopted the Citywide Resorts Textual content Modification, which extends the special-use allow requirement to all new lodge development tasks in all 5 boroughs. This primarily eradicated as-of-right lodge improvement in Manhattan.
The Citywide Resorts Textual content Modification additionally requires that lodge development commencing after December 9, 2021, use unionized development workforces. Lodge homeowners and operators should then adhere to collective bargaining agreements for hourly employees within the operational departments (rooms, meals and beverage, and engineering/upkeep). Thus, lodge homeowners and operators should think about the upper prices related to these labor necessities. We observe that meals and beverage operations leased to exterior operators are exempt from the unionized workforce requirement.
Though the event of limited- and select-service lodging amenities is predicted to be stifled by the NYC Citywide Resorts Textual content Modification, the potential stays for the event of upper-upscale and luxurious merchandise the place income era might offset the upper development and operational prices.
Expiration of Native Regulation 50 and New Housing Legal guidelines
Native Regulation 50 was enacted in 2015 to ban the conversion of resorts with greater than 150 guestrooms to alternate makes use of. Beneath Native Regulation 50, homeowners of huge resorts might convert solely 20% of the guestroom stock to a different use, equivalent to micro residences and pupil housing; not less than 80% of the property’s guestroom stock was required to be retained for lodge use. Native Regulation 50 expired in June 2019; thus, some resorts might function with a decreased guestroom rely in an effort to extend operational efficiencies.
Moreover, the Housing Our Neighbors with Dignity Act, or HONDA (S5257C/A6593B), that was signed into New York State regulation in June 2021 allows financially distressed resorts and workplace buildings to be completely transformed to reasonably priced housing. Furthermore, the Lodge Conversion Invoice (S4937C/A6262B) was enacted in June 2022, permitting residential resorts with totally different constructing rules (Class B resorts) positioned inside residential zoning districts or inside 400 toes of such districts to be transformed to everlasting residential items with their present certificates of occupancy.
Manhattan Market Forecast 2025–2029
Primarily based on our evaluation of the historic knowledge, a evaluation of the web new provide pipeline, the potential short-term affect of the present geopolitical elements and imposed tariffs, and the long-term outlook for demand development, we have now ready the next forecasts for the Manhattan lodging market via 2029.
Full Manhattan Restoration Anticipated to Be Delayed Till 2027/28
Supply: HVS
Manhattan New Provide Pipeline Anticipated to Contract After 2028 
Supply: CoStar/STR (Historic), HVS (Forecast)
Manhattan Occupancy, ADR & RevPAR Forecast to Stabilize in 2027/28
Supply: STR (Historic), HVS (Forecast)
MetLife Stadium has been awarded eight tournaments for the FIFA World Cup 2026, in addition to the World Cup ultimate. MetLife Stadium is positioned in East Rutherford, New Jersey, roughly ten miles (by automobile) northwest of Manhattan. Given this location, the World Cup matches can be hosted collectively by New York Metropolis and New Jersey. The eight World Cup tournaments and the World Cup ultimate are anticipated to considerably bolster leisure and tourism demand and ADR ranges for the native space. Manhattan is predicted to be significantly affected given the borough’s direct entry to/from northern New Jersey. The present geopolitical elements and the brand new administration’s immigration insurance policies might have an effect on visitation for the matches in 2026; nonetheless, the extent of affect stays to be seen.
Strengthening demand and a constrained provide pipeline are anticipated to help continued ADR development. Contributors to the anticipated demand development embrace the sustained return of worldwide leisure vacationers, additional gradual return of enterprise journey, and stronger assembly and group exercise. Occupancy is anticipated to succeed in the mid-to-high 80s by 2026/27, mirroring the market’s efficiency within the decade previous to the pandemic. We’ve forecast occupancy to stabilize at 88.8% in 2029, modestly larger than the 2019 peak, given the restricted provide pipeline.
Conclusion
The Manhattan lodging market skilled extraordinary development within the decade previous to 2020. Throughout this era, demand development was roughly 57%, which outpaced the 52% enhance in provide. Occupancy ranges have been firmly established within the higher 80s throughout this era. Nevertheless, the introduction of latest guestroom stock contributed to a decline in ADR from 2015 to 2017 and once more in 2019.
The COVID-19 pandemic altered the trajectory of Manhattan lodging efficiency and had extreme results available on the market starting in 2020. The market has been experiencing an accelerating restoration for the final three years, with development primarily as a consequence of sturdy beneficial properties in common price. The present geopolitical elements and the imposed tariffs and coverage modifications of the brand new administration, nonetheless, might have an effect on room-night demand within the brief time period. The market is effectively positioned for continued financial success over the long term, supported by a various base of employers, a strong tourism trade, and an expanded conference middle, in addition to a number of new and deliberate larger-scale, mixed-use developments. Occupancy ranges ought to return to historic norms as world journey continues to strengthen and New York Metropolis stays a premier gateway vacation spot. Lastly, as the web new provide is absorbed via 2028 and the brand new provide pipeline contracts significantly, ADR will increase are anticipated to strengthen, supporting the forecasted RevPAR development.
At HVS, we flip knowledge into highly effective insights that drive your success. Our distinctive methodology entails conducting major interviews inside native markets, capturing real-time insights and knowledge. This ensures a deep understanding of every market we function in, supplying you with a definite aggressive edge. Whenever you associate with HVS, you achieve entry to essentially the most present knowledge, unlocking the nuances of native dynamics and empowering you to make assured, strategic choices. For extra data on the Manhattan lodging market or for assist making knowledgeable funding choices that align together with your targets and danger tolerance, please contact your HVS New York Metropolis hospitality consultants, Roland de Milleret, MAI, at (516) 209-7305 or Patricia Shih at (404) 791-5509.
About Roland deMilleret, MAI
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Roland de Milleret, MAI, is a Senior Managing Director of HVS New York. Since becoming a member of HVS in 1999, Roland has offered lodge funding recommendation and carried out value determinations, feasibility research, and different consultancy assignments for over 3,500 resorts and resorts within the U.S., Mexico, and the Caribbean. His trade experience additionally consists of the collection of administration corporations and the negotiation of administration agreements. Roland is a number one professional on the Manhattan lodging market and has labored on assignments for many of the resorts in that market. Roland was an adjunct professor at NYU’s Faculty of Persevering with and Skilled Research, the place he taught a course on lodge improvement every spring semester from 2007 to 2009. For additional data, please contact Roland at (516) 209-7305 or rdemilleret@hvs.com.
About Patricia Shih
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Primarily based within the Manhattan workplace of HVS, Patricia Shih has greater than 15 years of expertise in hospitality, together with lodge appraisal and market research assignments throughout the jap United States. She spent greater than a decade beneath the Hilton Worldwide umbrella, in roles starting from Gross sales Consultant to Company Gross sales Supervisor at Hilton’s Embassy Suites Atlanta Perimeter Middle. She previously labored in administration roles on the Harvey Lodge and Harvey Suites – Dallas/Fort Value Worldwide Airport, in addition to on the Adam’s Mark Lodge in Downtown Dallas. Patricia earned her BBA in Strategic Administration with an emphasis in Organizational Habits from the College of North Texas. Contact Patricia at (404) 791-5509 or pshih@hvs.com.