Dive Brief:
- RevPAR, ADR and occupancy in New York City’s Manhattan borough saw “strong growth” in the second half of 2024 as the market continued to “move toward stabilization,” according to PwC’s Manhattan Lodging Index for the fourth quarter of 2024.
- In Q4, occupancy levels in the market, at 89.3%, marked a return to pre-pandemic stabilized levels, and RevPAR saw its highest year-on-year growth of any quarter in 2024, according to Abhishek Jain, a principal at PwC.
- With the anticipated stabilization of the market, however, “along with several new openings projected, growth is expected to moderate in 2025,” Jain said in a statement.
Dive Insight:
Manhattan — a “bellwether market,” per PwC — exemplified the nationwide trend of performance bifurcation, with luxury properties outperforming lower-priced hotels, per the report.
Luxury properties in the market saw RevPAR grow by 15.3% year on year in the quarter, driven by a 4.9% bump in occupancy from 80.4% in Q4 2023 to 84.3% in Q4 2024 and a 9.9% increase in ADR from $639.89 to $703.55.
Occupancy and ADR for upscale properties, meanwhile, grew just 2.3% and 6.5% year on year, respectively, resulting in a 9% RevPAR increase. Upper upscale and upper midscale properties saw RevPAR growth in the quarter of 10.6% and 10.8%, respectively.
A November PwC report projected that upper-tier segments would offer “a redeeming trend” in 2025 for the hospitality industry, which is set to see muted supply and demand growth nationwide.
Manhattan hotel transaction activity remained steady in the second half of 2024, with the Crowne Plaza Times Square fetching the highest transaction price of $334 million, followed by Thompson Central Park at $307 million, per PwC. Other notable purchases included Canadian investment firm Leyad’s $62 million acquisition of Ink48 Hotel.
Openings slated for 2025 include IHG Hotels & Resorts’ Kimpton Rockefeller Center and Hilton’s revamped Waldorf Astoria New York, both in Midtown.
In its second-quarter Manhattan Lodging Index, released in August, PwC noted that Manhattan hotels could expect to benefit from minimal room supply growth in the coming years.
