The COVID-19 pandemic continued to severely impair Manhattan hotels in the second quarter, as travel restrictions and business closures remained the new normal.
With over 60,000 hotel rooms currently closed, widespread cancellation of group travel, and heightened economic uncertainty, second quarter revenue per available room (“RevPAR”) experienced a year-over-year decline of 81.6%. This represents the largest decline in RevPAR in modern history for the market.
Unprecedented closures continue to impact Manhattan hotels
Six months since the start of the COVID-19 pandemic, Manhattan’s lodging sector continues to experience record closures. As of early September, approximately 61,450 hotel rooms (representing 58% of total inventory) in Manhattan were closed, with approximately 2,700 rooms reporting to stay closed permanently. It’s not surprising that, given their operating cost structure, higher-priced hotels are disproportionately impacted.
Luxury and Upper Upscale class hotels are the most impacted, with 70% or more of hotel rooms in each of these segments closed. Upper upscale hotels are experiencing the highest levels of permanent closures. On the other hand, lower-priced hotels have been relatively less impacted, driven by a combination of factors, including a comparatively lower operating cost structure.