The city’s hotel industry didn’t roll out the welcome mat for a sunny forecast from CBRE which claimed that pandemic-battered inns are doing just fine.
Hotel Association of New York City president and CEO Vijay Dandapani threw shade on the real estate company’s rosy forecast as his organization lobbies for a big cut in the city’s hotel occupancy tax from 5.875 percent to 2.875 — as well as for reduced property taxes.
Lawmakers are likely to be less receptive to the pitch if hotels are in better shape that recent gloomy reports have suggested. But as in most data comparisons, there’s some truth to both perspectives.
Dandapani said CBRE’s survey, which The Post reported on Tuesday, was off base in predicting a return to pre-pandemic occupancy and revenue by 2024.
“We are cheerleaders for the city, but there’s a gap between expectations and hope,” Dandapani said.
The optimistic prediction was written by Dan Hanrahan, CBRE senior vice-president of Hotels Advisory for the northeast. Dandapani said that Hanrahan’s forecast that revPAR — or revenue per available room, a key industry metric — would “leapfrog back to 2019 numbers” this year was “very unlikely.”
If it does, “We can all buy a drink at Christmas,” Dandapani deadpanned.
CBRE based its cheery forecast on data from this year’s first quarter, which showed upticks in occupancy levels, room rates and revPAR.
The Hotel Association’s own data for the first five months of 2022 show average revPAR for this year, although rising on average from 2021 lows, still well below 2019 — $155 compared with $184 before the virus struck.
“In order to catch up, revPAR would have to considerably exceed the current $155 for the rest of the year. Crossing the chasm is not impossible, but it is unlikely,” Dandapani said.
Moreover, he said that revPar in 2019 and in 2022 have different meanings, given that the city’s hotel rooms shrunk from about 122,000 in 2019 to around 100,000 today.
Luxury-class inns such as the Baccarat, the St. Regis, Pierre and the Four Seasons downtown are outperforming cheaper properties, he said.
But many hotels at all price points remain closed — from top-tier Four Seasons on East 57th Street, to the mid-market Marriott Eastside on Lexington Avenue, to budget lodgings in Chelsea and the Far West Side.
“Most elected officials are pushing for changing closed hotels to housing,” Dandapani said. “What that means is, there are a lot of closed hotels” — and the losses haven’t been fully offset by recent openings such as the Hard Rock and Riu hotels near Times Square.
Other troubling “headwinds” include the sluggish return of international business travel and the near-complete loss of visitors from China and Brazil.
But Dandapani acknowledged at least one promising vital sign. Asked how much guests were paying per room today compared with pre-pandemic days, he said last week’s average cost across all hotel classes was $263 — “within five percent, within striking distance, of 2019,” he said.
[Written in collaboration with other media outlets with information from the following sources]
