121 New York City hotels have been taken off the market and converted into shelters for migrants. – There are growing concerns that a lack of space and soaring room prices could lead to a decline in tourism.
As actual hotel rates have soared to over $300 a night, roughly 16,000 former hotel rooms are now booked to accommodate the influx of immigrants to New York.
“There’s no question that hotel prices are rising as a result of a large supply of hotel rooms being taken off the market,” said Nicole Gelinas, a senior fellow at the Manhattan Institute, a conservative think tank.
She said it would be a problem for middle-income earners who are considering coming to the city for the weekend and booking a mid-range hotel.
“It’s becoming too expensive for people. It’s obviously hurting the tourism industry,” Gelinas said.
The scale of the closures was revealed at a hotel industry event on Tuesday morning, with around 15% of the city’s 121,300 hotels now off the market.
Another 6,000 hotel rooms have been shuttered altogether during the COVID-19 pandemic, according to industry groups, and the potential for rising costs may not be something the city can ignore for long.
“This has been a contentious issue. We have concerns about the cost profile, including the hotel,” Gary Lavin, finance chairman of the Jacob Javits Convention Center board of directors, said Tuesday.
But, he added, “It’s not a crisis yet.”
While the lack of space may be putting pressure on consumers, The Washington Post previously reported that the migrant crisis is actually a boon for many mid-range and budget hotels that have been hit hard by the coronavirus pandemic.
By converting the hotels into migrant shelters, the city is able to fill all of the hotel rooms (100% occupancy) and receive a steady stream of revenue by paying an average of $156 per room per day.
The Post reported last September that New York City had extended its contract with the New York City Hotel Association for three years, paying a massive $1.3 billion — nearly five times the original $275 million — just to pay rent for the vast network of hotels that had been converted into emergency shelters.
Even the boutique hotels in the heart of the theater district cater to immigrants, not tourists.
The head of the New York City Hotel Association acknowledged that consolidation, or “compression,” in the hotel market is one of many factors that are leading to higher hotel room rates.
“Higher hotel room rates, partly due to compression but partly due to inflation, are creating a hurdle for meeting planners looking to book New York as a travel destination,” said Vijay Dandapani, CEO of the hotel association.
“A hotel tax of approximately 18 percent added to room rates will make the city even less competitive and drive guests to other destinations,” he added.
Dandapani stressed that hotel occupancy rates for the same period remained roughly the same as in 2019, meaning there is no “room shortage.”
According to a recent analysis by Comptroller Tom DiNapoli’s office, average hotel occupancy rates were 89.6% in 2019 but plummeted in the post-consolidation, pandemic years, and then dropped to 82% at the end of last year.
DiNapoli said the migrant crisis has clearly improved revenue for the hotel industry.
“This growth has been driven in part by hotels housing asylum seekers: in recent months, the city has been housing more than 60,000 asylum seekers per month,” the analysis said.
“The city is housing some of these asylum seekers in mid-range to budget hotels in the city, paying the average cost of lodging. [average daily rate] It’s $156 per room.”
The auditor’s office also found that the roommate’s income was more than $300.
Mayor Eric Adams’ office insisted the migrant crisis has not negatively affected tourism: The city has processed more than 200,000 asylum seekers since July 2022.
“When the Adams Administration took office, tourism arrivals were at their fourth-lowest level in the last 20 years, but New York City is now recovering – last year we recorded the fourth-highest tourism numbers on record, we expect to attract approximately 64 million tourists this year, and we project a full recovery of more than 68 million visitors by 2025,” a mayoral spokesman said.
“The return of tourists to New York City is reflected in hotels, who are seeing increased demand. New York City is safer and cleaner, and as the numbers show, it remains one of the most popular tourist destinations in the United States.”
City hall said hotel rates were rising due to inflation and demand, a phenomenon also occurring in other cities, along with soaring costs of goods, services and labor.
Officials even acknowledged that New York has historically been the most expensive city in the continental United States.
The mayor’s office said many of the hotels now hosting migrants were struggling before the pandemic. – Includes the Roosevelt Hotel in Midtown – It’s closed.
