One of the world’s most visited travel destinations, Manhattan, is continuing to show declines in room rates, which outweighed improving occupancy levels in the New York City borough’s hotels during third quarter.
According to just-released data from PwC, this continues a pattern established last year.
The PwC report noted while supply growth appears to have finally peaked in Manhattan, Q3 marks the tenth quarter of declining RevPAR since the start of 2015.
The research indicated, “Although supply growth may no longer be the top threat to the Manhattan lodging market, several other factors, including perceived political uncertainty and international travel restrictions, as well as a profound shift in demand segmentation, remain real concerns.” Despite these, demand growth during the quarter of 3.4% outpaced an increase in supply of 2.2%, resulting in occupancy being up 1.2%. A continued lack of pricing power resulted in a 2.3% drop in ADR. As a result, RevPAR declined 1.1%, data showed.
Through the first nine months of this year, RevPAR was down 1.3%, according to PwC.
Higher-priced hotels in the luxury and upper-upscale segments had greater occupancy growth and less-severe offsetting declines in ADR, resulting in them outperforming hotels in the upscale and upper-midscale segments, according to the report. Luxury was the only segment that saw RevPAR growth, at 1.5%.
PwC research showed RevPAR performance in upper-upscale hotels was relatively unchanged, declining 0.1%. Hotels in the upscale and upper-midscale segments reported decreases in RevPAR of 3.5% and 2.8%, respectively.
For both the full-service and limited-service segments, occupancy levels increased while ADR decreased, resulting in declining RevPAR levels, noted PwC. Full-service hotels were once again hit the hardest, with a 1.1% drop in RevPAR, while limited-service hotels saw a 0.8% decline, the data showed. Through the first three quarters of the year, limited-service hotels increased RevPAR by 0.3%, while full-service hotels experienced a decline of 1.6%.
Both independent and chain-affiliated hotels reported occupancy growth but RevPAR declines. However, with less occupancy growth in independent hotels, and a drop in ADR, independent properties experienced a more-pronounced decline in RevPAR performance, declining 2.2%, compared to just 0.4% for chain-affiliated properties, the PwC data indicated.
