Although supply growth may no longer be the top threat to the Manhattan lodging market, several other factors, including perceived political uncertainty and international travel restrictions, as well as a profound shift in demand segmentation, remain real concerns.
aAccording to latest PwC's Manhattan Lodging Index, continuing declines in room rates outweighed improving occupancy levels in Manhattan hotels during the third quarter, extending a pattern established last year. Although supply growth appears to have finally peaked, Q3 marks the tenth quarter of declining RevPAR since the beginning of 2015.
Although supply growth may no longer be the top threat to the Manhattan lodging market, several other factors, including perceived political uncertainty and international travel restrictions, as well as a profound shift in demand segmentation, remain real concerns. Despite these, demand growth during the quarter of 3.4 percent outpaced an increase in supply of 2.2 percent, resulting in occupancy being up 1.2 percent. A continued lack of pricing power resulted in a 2.3 percent drop in average daily rate (“ADR”). As a result, revenue per available room (“RevPAR”) declined 1.1 percent. Through the first nine months of this year, RevPAR was down 1.3 percent.
In the third quarter, higher-priced hotels in the Luxury and Upper Upscale classes had greater occupancy growth and less severe offsetting declines in ADR, resulting in them outperforming hotels in the Upscale and Upper Midscale classes. Luxury hotels were the only segment that saw RevPAR growth, at 1.5 percent. RevPAR performance in Upper Upscale hotels was relatively unchanged, declining 0.1 percent. Hotels in the Upscale and Upper Midscale classes reported decreases in RevPAR of 3.5 and 2.8 percent, respectively.
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She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
