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THERE ’ S NO CITY LIKE IT , BUT IS THAT ENOUGH FOR HOTEL INVESTORS ?
Contributed by STEFANI C . O ’ CONNOR
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Change is constant for the hotel sector , especially in New York City , where acquiescing to and combating the myriad local , national and international events is an ongoing occurrence for hotel owners , operators , developers and investors . Right now , the market and the industry players who create it are witnessing a mix of influences that are expected to help shape the outlook for the New York hotel space overall as it moves into 2024 . Key among these are hotels coming offline to traditional guests |
for use instead as homeless / migrant housing , a recovery in demand , a crack-down on short-term rentals , shifts in municipal regulations , particularly targeting new hotel development and expansion , and an overarching tightening on new-construction loans due to interest rate hikes .
How much of this affects the appeal of New York ’ s reputation as a high-barrier-to-entry market , and whether it still ranks high as a “ have-be-there ” market for industry movers and shakers , may be up for debate depending on interested stakeholders ’ goals .
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Financial performance is often bifurcated into the top line and the bottom line . And while revenue continues to be buoyant , contends Sean Hennessey , founder and CEO of Lodging Advisors and an associate professor at the Jonathan M . Tisch Center of Hospitality at New York University , profit margins are being squeezed . “ New York City hotel investments remain offlimits for some investors , but not for others . While top-line fundamentals are improving , profit growth has lagged due to local minimum wage initiatives , |
20 hotelsmag . com Jan / Feb 2024 |