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Mega-Projects Will Turn NYC Hotel Glut into Shortage
A surge in transformative developments on Manhattan’s East and West Sides, as well as Downtown, could turn the surplus of hotel rooms into a shortage for some submarkets over the next five years, JLL said in a new report. That’s because the level of existing and anticipated Class A office space in the market will support rapid hotel room absorption.
In further positive news for New York hoteliers, JLL’s analysis found that metrics are on the upswing. Gross operating profit (GOP), which bottomed in 2016, is increasing and year-to-date demand has grown by 6%.
“Over the analyzed period, we noted that GOP is more sensitive to changes in RevPAR than supply,” said JLL’s Gilda Perez-Alvarado. “As such, with sustained improvement in demand fundamentals and muted supply growth, the market will gain more rate integrity, resulting in positive RevPAR growth and stabilized margins at year-end.”
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