The Newark Airport resort market has confronted vital changes because the onset of the COVID-19 pandemic. Modifications to the submarket’s resort provide, coupled with the rebound in passenger ranges by way of Newark Airport, have resulted in a sluggish however regular restoration of the resort market. Latest and upcoming enlargement tasks at Newark Airport assist a optimistic outlook.
Altering Resort Panorama
As passenger visitors ranges at Newark Liberty Worldwide Airport lessened on the onset of the COVID-19 pandemic, resort demand inside the surrounding airport submarket declined considerably as properly. This supplied a chance for property out there that have been plateauing from an ADR perspective or have been approaching brand-mandated PIP renovations to undertake vital renovation tasks. The previous Hampton by Hilton positioned on Spring Avenue, straight west of U.S. Route 1/9, was renovated and transformed to a Vacation Inn Specific in April 2021. The previous Vacation Inn, additionally positioned straight west of U.S. Route 1/9, was renovated and transformed to a Hampton by Hilton in Could 2022. Lastly, the previous Nation Inn & Suites, positioned southeast of Newark Airport and adjoining to The Mills at Jersey Gardens, was renovated and transformed to a Hampton by Hilton in December 2022. It is usually value noting {that a} Home2 Suites by Hilton opened within the submarket in January 2019, whereas a Consolation Inn & Suites opened in November 2023, rising the variety of accessible midscale resort rooms out there by virtually 15%.
Restoration of Resort Submarket
Regardless of the modest will increase in resort provide, the renovation of a number of property and the rebound in passenger visitors have resulted in a sluggish however robust total restoration of the Newark Airport resort submarket. By year-end 2023, resort occupancy on this airport resort market rebounded to simply below 78%, based on STR. This degree falls barely under the pre-pandemic occupancy peak of practically 84%. Occupancy knowledge for 2024 illustrate additional enchancment however stay behind pre-pandemic ranges. Whereas market occupancy has not but totally recovered, market ADR has adopted a a lot totally different development. ADR for this Newark Airport resort submarket surpassed its pre-pandemic peak in 2022 and elevated additional in 2023 by virtually 10%. ADR progress slowed considerably in 2024 however remained favorable. The numerous good points in market ADR resulted in a 2024 RevPAR degree roughly $15 above the pre-pandemic peak.
The lagging restoration in market occupancy is attributed to numerous components, together with the aforementioned will increase in resort provide. The everlasting shift in workplace dynamics is one other concern, as remote-work developments and insurance policies have endured. Furthermore, given this continuation of remote-work insurance policies, coaching teams from close by corporations and different sources of corporate-group demand have lagged in returning to the market. Luckily, robust leisure journey to close by New York Metropolis has largely offset the delayed restoration of economic and group demand.
Market RevPAR Evaluation
An evaluation of the Newark market RevPAR degree as in comparison with the nationwide common illustrates how vital the decline in demand was on the onset of the COVID-19 pandemic, in addition to the place the airport submarket is in its total restoration. Newark’s RevPAR has traditionally registered above the nationwide common; nevertheless, the metro space suffered heavier losses throughout the pandemic and has been slower in its restoration. However, demand progress and powerful ADR good points have fueled enhancements in RevPAR by way of 2024, which registered a 119% penetration when in comparison with the nationwide RevPAR common, based on STR. This degree is barely under the pre-pandemic peak of 120%, indicating there may be nonetheless some room for restoration.
Newark Resort Market RevPAR Penetration Nearing Full Restoration After 2020 Decline
Supply: STR
Newark Airport Upgrades
The efficiency of the Newark Airport resort submarket is straight tied to the degrees of passenger visitors by way of the airport, which surpassed pre-pandemic ranges in 2023. Based on airport officers, passenger visitors remained comparatively secure in 2024 however decreased by 3.0% in February 2025 and 1.6% in March 2025. The current minor decreases are a results of financial uncertainty relating to the tariffs instituted by the federal authorities, which has led to a decline in each worldwide and home journey. The upgrading of the airport’s services is a crucial part in sustaining constant progress in passenger visitors ranges.
Newark Airport has undergone quite a lot of upgrades during the last decade. Most just lately, the Terminal A Redevelopment Program was accomplished in early 2023 and have become totally operational in August 2023. The $2.7-billion, one-million-square-foot Terminal A is LEED Gold-certified and options 33 new gates, improved airside and landside infrastructure, and numerous state-of-the-art passenger facilities.
Ongoing tasks as a part of the EWR Imaginative and prescient Plan embrace the development of a brand new AirTrain system and plans to redevelop Terminal B and improve the prevailing Terminal C, as detailed under.
- Following years of debate, plans for the AirTrain Newark Alternative Program have been introduced in August 2023. The brand new AirTrain system will join the airline terminals, rental-car services, resort shuttle space, and RailLink station (the place NJ Transit and Amtrak rail strains are positioned). Development is predicted to start in 2025, and the AirTrain is deliberate to be totally operational in 2029 at an estimated value of $570 million.
- The Terminal B redevelopment and Terminal C enhancement tasks have been introduced in October 2024; a timeline has not but been established. The Port Authority of New York and New Jersey reported that these tasks will assist progress in passenger visitors within the years to come back.
The current Terminal A enlargement elevated the airport’s capability, whereas the anticipated Terminal B and Terminal C tasks will permit for extra passenger-traffic progress. The development of an AirTrain is anticipated to enhance the effectivity of journey to the airport and ease of entry to the accommodations within the submarket. Native accommodations are anticipated to learn from construction-related demand as these upgrades are carried out, in addition to elevated visitation as soon as full.
Market Outlook
Whereas occupancy for the Newark Airport resort market has not but regained its pre-pandemic ranges, ADR progress has been very robust lately, leading to a 2024 market RevPAR degree considerably above the pre-pandemic peak. Moreover, there aren’t any new accommodations below development or deliberate for improvement inside the airport submarket, which ought to forestall vital disruptions within the coming years.
It is very important observe that the accessible resort provide within the larger New York Metropolis market has declined considerably because the onset of the COVID-19 pandemic. Many accommodations inside Manhattan and the outer boroughs have both closed completely or been transformed to momentary shelter housing, thereby creating extra potential overflow demand to markets like Newark, significantly in periods of peak exercise. It is usually vital to notice that tourism and journey are anticipated to say no nationwide in 2025 given the brand new federal administration’s insurance policies; nevertheless, it isn’t but clear if or how this may have an effect on the Newark market. Total, the outlook for the Newark Airport resort market is optimistic presently given the robust passenger visitors ranges at Newark Liberty Worldwide Airport, the numerous upgrades on the airport, and the dearth of latest resort provide deliberate for the world.
At HVS, we flip knowledge into highly effective insights that drive your success. Our distinctive methodology entails conducting main 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. Once you accomplice with HVS, you acquire entry to essentially the most present knowledge, unlocking the nuances of native dynamics and empowering you to make assured, strategic selections. For complete details about the Newark market or for help in making funding selections that align along with your particular objectives and danger tolerance, please contact Cole Masler.
Cole Masler is a Consulting and Valuation Supervisor with the HVS New York workplace. He graduated from The Ohio State College in December 2020 with a Bachelor of Science in Hospitality Administration/Administration. Whereas learning at Ohio State, Cole was an energetic member within the Hospitality Administration Affiliation. Previous to his arrival at HVS, Cole was the Assistant Resort Supervisor on the Three Village Inn, a boutique resort in Stony Brook, New York, and held quite a lot of positions in restaurant and catering operations. Contact Cole at +1 (516) 492-8595 or cmasler@hvs.com.
This text initially appeared on HVS.