»»Slumping Economy Affects Hotel Occupancy, But Not in NYC
According to Smith Travel Research hotel occupancy levels in the United States are down about 5 percent from last year.
New York remains one of the few bright spots, as a weak dollar continues to attract international travelers.
The International Herald Tribune quoted Bjorn Hanson, professor at the Tisch Center for Hospitality at New York University, saying: “New York’s occupancy rates are down a little bit, to about 85 percent this year, as more hotels have opened their doors”.
However he also warned that New York hotels would be the hardest hit if the dollar’s value rose and the economy - both at home and overseas - continued to slow.
Hanson said that at current profit levels, most hotels could endure significantly lower occupancy and still make money. On average, he said, hotels break even at 54 percent occupancy.
Until recently, the industry was in the midst of a major boom, and it was during those good times that the hotel companies made plans to build many of the new rooms. […] The industry now has about 6,000 new hotels, with nearly 800,000 rooms, under development, a 27 percent increase from last year, according to Lodging Econometrics, a consulting firm in Portsmouth.
But perhaps more telling is the number of projects that have been called off in the last three months - 327 - after investment banks like Lehman Brothers, UBS and Merrill Lynch began to cut financing for the new construction, according to Lodging Econometrics. (source)
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