Migrant occupancy, Airbnb restrictions boosting recovery of hotel industry in New York City
People walk out of New York City's new migrant "welcome center" at the former four-star Roosevelt Hotel in midtown Manhattan on May 24. Credit: AFP / Timothy A. Clary via Getty Images
New York City’s pandemic-battered hotel industry is slowly starting to recover, buoyed by municipal contracts to house thousands of foreign migrants arriving from abroad as well as a near-total ban citywide on services such as Airbnb.
Add to the mix rules enacted two years ago at the urging of the hotel-worker union that put up bureaucratic hurdles to opening any new hotel, and nightly rates are up, vacancy down, across the city.
For September, the occupancy rate was 87%, according to Vijay Dandapani, president and chief executive of the Hotel Association, a lobbying group representing hundreds of the city’s biggest hotels. It was 86% that month in 2022 and almost 66% in 2021. It was 38% in September 2020.
“We fell off a cliff starting from March all the way through the end of the year” in 2020, he said.
Just a year earlier, it had been 89.5%.
There are about 700 hotels in the city's five boroughs, with 118,000 rooms, he said.
Current rates are higher than in 2019, when the average night was $306. It was $136 in 2020. It’s now $329.
Still, if the room rate had kept up with inflation, a room that cost $306 in 2019 would be going for $366.82, according to the Bureau of Labor Statistics’ online calculator.
But there are caveats for the industry to the favorable news: 13% of hotel rooms citywide are being occupied by the migrants.
If fewer migrants are housed in hotels — and the Adams administration has announced a series of policies to discourage long-term stays and start to house some migrants in tents — the trendline of price and occupancy could reverse.
“Migrants are now staying in over 100 hotels — mostly small hotels — but they’re taking up about 15,000 keys, rooms, so that has resulted in compression, as we call it in our industry, meaning, you’ve got less supply, and so therefore the rates have moved upwards,” Dandapani said.
The Adams administration has accused the hotel industry of jacking up rates as the city struggles to house over 60,000 of the migrants.
“People know that we’re desperate,” said Anne Williams-Isom, a deputy to Mayor Eric Adams who is overseeing the crisis response.
Said Adams’ chief of staff, Camille Joseph Varlack: “They’re raising the price on the hotels when the hotel contracts come up for renewal.”
The hotel association’s chief responded in an interview: “Reduction in supply causes prices to go up. That’s basic economics.”
Adams’ press office didn’t respond to an inquiry seeking cost specifics.
Earlier this year, the city estimated there were 10,800 illegal short-term rentals.
The city has said it’s spending an average of about $383 per migrant per night — which covers room, board and other costs.
In September, new rules went into effect restricting Airbnb, Vrbo and other such platforms, including requiring that dwellings be registered with the city — allowing enforcement — and that the dwelling’s permanent resident be present during a short-term rental. City rules also state that rentals of fewer than 30 days are prohibited except if the permanent resident is present. There are caps on how many guests are allowed. Failing to comply could lead to fines for hosts and platforms. There is a backlog, an application fee, and the city says a swell of applications “will slow average review time.”
The rules were the latest development in a yearslong battle by the city to restrict services such as Airbnb.
Jennifer Burner Barden, an external spokeswoman for Airbnb, said she didn’t have statistics on listings and pricing to share. She provided statements from several Airbnb officials.
A statement from Theo Yedinsky, Airbnb’s global policy director, said: “New York City’s new short-term rental rules are a blow to its tourism economy and the thousands of New Yorkers and small businesses in the outer boroughs who rely on home sharing and tourism dollars to help make ends meet. The city is sending a clear message to millions of potential visitors who will now have fewer accommodation options when they visit New York City: You are not welcome.”
And one from Nathan Rotman, Airbnb’s public policy regional lead, said the company was working with the mayor’s Office of Special Enforcement, the unit involved in combating illegal rentals.
“We have worked closely with OSE staff to support their compliance efforts, including by connecting to their verification system, which flags unregistered listings and helps short term rental platforms prevent listings that fail the City’s verification from hosting short-term stays,” Rotman said.
Court challenges to the law were dismissed in August.
In addition to the Airbnb restrictions, supply and demand are being constricted by a requirement that has stymied almost all hotel construction: Whereas hotels in most places could be opened as of right now, the rules require a monthslong land-review process, a vote and other roadblocks. The city's new measures were passed at the behest of the hotel worker union, which had lobbied for the rules to combat an increase of nonunion hotels.
Dandapani said since the requirement was put into place, there hasn’t been a single new hotel permitted.
Still, as the city restricts platforms such as Airbnb, short-term rentals on the black market remain available on Craigslist and other sites.
New York City’s pandemic-battered hotel industry is slowly starting to recover, buoyed by municipal contracts to house thousands of foreign migrants arriving from abroad as well as a near-total ban citywide on services such as Airbnb.
Add to the mix rules enacted two years ago at the urging of the hotel-worker union that put up bureaucratic hurdles to opening any new hotel, and nightly rates are up, vacancy down, across the city.
For September, the occupancy rate was 87%, according to Vijay Dandapani, president and chief executive of the Hotel Association, a lobbying group representing hundreds of the city’s biggest hotels. It was 86% that month in 2022 and almost 66% in 2021. It was 38% in September 2020.
“We fell off a cliff starting from March all the way through the end of the year” in 2020, he said.
WHAT TO KNOW
- Vacancy rates are down and prices up for hotel rooms citywide.
- Municipal contracts to house thousands of foreign migrants arriving from abroad are buoying the New York City hotel business.
- A near-total ban citywide on short-term stay services such as Airbnb also has boosted the hotel industry.
Just a year earlier, it had been 89.5%.
There are about 700 hotels in the city's five boroughs, with 118,000 rooms, he said.
Current rates are higher than in 2019, when the average night was $306. It was $136 in 2020. It’s now $329.
Still, if the room rate had kept up with inflation, a room that cost $306 in 2019 would be going for $366.82, according to the Bureau of Labor Statistics’ online calculator.
But there are caveats for the industry to the favorable news: 13% of hotel rooms citywide are being occupied by the migrants.
If fewer migrants are housed in hotels — and the Adams administration has announced a series of policies to discourage long-term stays and start to house some migrants in tents — the trendline of price and occupancy could reverse.
Migrants in more than 100 hotels
“Migrants are now staying in over 100 hotels — mostly small hotels — but they’re taking up about 15,000 keys, rooms, so that has resulted in compression, as we call it in our industry, meaning, you’ve got less supply, and so therefore the rates have moved upwards,” Dandapani said.
The Adams administration has accused the hotel industry of jacking up rates as the city struggles to house over 60,000 of the migrants.
“People know that we’re desperate,” said Anne Williams-Isom, a deputy to Mayor Eric Adams who is overseeing the crisis response.
Said Adams’ chief of staff, Camille Joseph Varlack: “They’re raising the price on the hotels when the hotel contracts come up for renewal.”
The hotel association’s chief responded in an interview: “Reduction in supply causes prices to go up. That’s basic economics.”
Adams’ press office didn’t respond to an inquiry seeking cost specifics.
Earlier this year, the city estimated there were 10,800 illegal short-term rentals.
The city has said it’s spending an average of about $383 per migrant per night — which covers room, board and other costs.
In September, new rules went into effect restricting Airbnb, Vrbo and other such platforms, including requiring that dwellings be registered with the city — allowing enforcement — and that the dwelling’s permanent resident be present during a short-term rental. City rules also state that rentals of fewer than 30 days are prohibited except if the permanent resident is present. There are caps on how many guests are allowed. Failing to comply could lead to fines for hosts and platforms. There is a backlog, an application fee, and the city says a swell of applications “will slow average review time.”
The rules were the latest development in a yearslong battle by the city to restrict services such as Airbnb.
Airbnb responds to restrictions
Jennifer Burner Barden, an external spokeswoman for Airbnb, said she didn’t have statistics on listings and pricing to share. She provided statements from several Airbnb officials.
A statement from Theo Yedinsky, Airbnb’s global policy director, said: “New York City’s new short-term rental rules are a blow to its tourism economy and the thousands of New Yorkers and small businesses in the outer boroughs who rely on home sharing and tourism dollars to help make ends meet. The city is sending a clear message to millions of potential visitors who will now have fewer accommodation options when they visit New York City: You are not welcome.”
And one from Nathan Rotman, Airbnb’s public policy regional lead, said the company was working with the mayor’s Office of Special Enforcement, the unit involved in combating illegal rentals.
“We have worked closely with OSE staff to support their compliance efforts, including by connecting to their verification system, which flags unregistered listings and helps short term rental platforms prevent listings that fail the City’s verification from hosting short-term stays,” Rotman said.
Court challenges to the law were dismissed in August.
In addition to the Airbnb restrictions, supply and demand are being constricted by a requirement that has stymied almost all hotel construction: Whereas hotels in most places could be opened as of right now, the rules require a monthslong land-review process, a vote and other roadblocks. The city's new measures were passed at the behest of the hotel worker union, which had lobbied for the rules to combat an increase of nonunion hotels.
Dandapani said since the requirement was put into place, there hasn’t been a single new hotel permitted.
Still, as the city restricts platforms such as Airbnb, short-term rentals on the black market remain available on Craigslist and other sites.
Matthew Chayes, a Newsday reporter since 2007, covers New York City.
Updated 50 minutes ago Agent license foul-up... 'Dress for Success' goes mobile ... Get the latest news and more great videos at NewsdayTV
Updated 50 minutes ago Agent license foul-up... 'Dress for Success' goes mobile ... Get the latest news and more great videos at NewsdayTV