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Thursday, April 09, 2009

NY Hotels: Less Demand, More Supply

by Calculated Risk on 4/09/2009 10:55:00 PM

The markets are closed on Friday.

CR will be open.

The following article is mostly about workers' pay, but there are some interesting stats on the New York hotel market.

From the NY Times: With More Rooms Empty, Hotels Seek to Cut Worker Pay

With the city’s hotels in the midst of a sudden slowdown in business, operators are seeking wage cuts and other concessions from the unions representing 27,500 bellhops, housekeepers and waiters.
The average occupancy rate at New York City hotels in the first two months of this year was 61.8 percent, down from 73.5 during the same period last year, according to Smith Travel Research, a national hotel research firm. At the same time, the average daily room rate dropped to $196.30, from $232.25.
The industry’s problems are compounded by the prospect of 10,000 new hotel rooms in 2009 and 2010.

“We’re in this classic economic model where we’ve got declining demand because of the economy and added supply,” said John Fox, a hotel consultant with PKF Consulting.