CoStar Analytics
Summary:
In response to the housing needs of the unhoused, refugees, and migrants, over 16,000 hotel rooms in New York City have been repurposed, with 140 hotels no longer available for travelers as of October. Various city and county authorities have secured these accommodations through long-term leases, reducing future hotel room supply. The impact is particularly noticeable in different market segments, with a concentration of projects in major areas like midtown, Queens/Brooklyn, and JFK/Jamaica. The transformation of these hotels, most of which were midscale or economy properties, may have a lasting effect on New York City’s hotel performance, potentially leading to higher average daily rates in the future. Despite ongoing construction, the city’s supply pipeline for new hotels is expected to be limited due to recent zoning and development regulations.