11,000 Manhattan Hotel Rooms Could Be Lost As Pandemic Takes Toll On Hospitality Industry, Study Suggests - Forbes

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Topline

Roughly 11,000 hotel rooms in Manhattan that were available before the coronavirus pandemic began may not come back on the market, according to an analysis by advisory groups in the hospitality industry Monday, but the development of new hotels is likely to make the net loss much lower.

Key Facts

Approximately 11,100 hotel rooms may be lost to closure, resizing or conversion to alternative uses out of the roughly 104,000 rooms that were available in Manhattan before the pandemic, according to a study by LW Hospitality Advisors and JLL Hotels and Hospitality Group.

However, around 9,600 new rooms are expected to open as a result of hotel development projects that were in the pipeline, bringing the net change to a decline of about 1,500 rooms, or 1.4%, from pre-pandemic levels.

Fewer rooms could be lost due to legislation passed by the New York City Council that requires dormant hotels to pay out severance to former employees unless they have recalled at least 25% of their workers by Oct. 11 and are open to the public by Nov. 1.

Urban hotel markets have been slow to recover due to the collapse of business travel.

Surprising Fact

New York’s lodging industry is expected to earn $531 million from business travelers this year — a huge drop from $4 billion in 2019, before the pandemic, according to research published by Kalibri Labs and the American Hotel & Lodging Association,Bloomberg said.

Key Background

At the height of the pandemic, around 40,000 hotel rooms in the city, or 30% of inventory, were shuttered, according to the study. Of those, around 6,000 rooms were back in business as of March. Whether the industry will bounce back to pre-pandemic levels is an open question as the pandemic has reshaped how companies conduct business, with virtual meetings substituting for in-person gatherings. The pandemic may permanently reduce business travel by 19% to 36%, according to a study by three respected airline industry figures and the Wall Street Journal.