New York City hotel owners have been hoping for a big year-end boost to their business as international tourists start to return during what is traditionally a bustling time of the year.

But early indicators suggest limited holiday cheer for the city’s beleaguered hospitality sector.

Real-estate company CBRE Group Inc.’s hotel division expects...

New York City hotel owners have been hoping for a big year-end boost to their business as international tourists start to return during what is traditionally a bustling time of the year.

But early indicators suggest limited holiday cheer for the city’s beleaguered hospitality sector.

Real-estate company CBRE Group Inc.’s hotel division expects citywide occupancy to reach about 56% in the fourth quarter. That represents only a slight improvement from the prior quarter, even though New York City hotel owners say occupancy rates look poised to rise in December compared with the previous two months.

“We’re going to get some visitation over the holidays but I don’t think this is a cure-all in any way,” said Rachael Rothman, head of hotels research and data analytics at CBRE.

“‘We’re going to get some visitation over the holidays but I don’t think this is a cure-all in any way.’”

— Rachael Rothman, head of hotels research and data analytics at CBRE.

While the city’s hotels expect stronger bookings from domestic visitors arriving for holiday shopping, Broadway shows and to view the giant Christmas tree at Rockefeller Center, Ms. Rothman said international travel this holiday season will remain subdued, with foreign tourism not picking up until next spring when the weather starts to warm up.

The holiday season is a crucial period for New York City hotels, and usually a big driver of lodging revenue for the fourth quarter. In 2019, city hoteliers charged among their highest rates of the year during the first two weeks of December, surpassed only by the last week in September, when world leaders met for the United Nations General Assembly, according to hotel-data company STR.

Tourist visits to New York City dropped 67% last year from a record-high 66.6 million in 2019, costing the city about $1.2 billion in tourism-related tax revenue, according to state Comptroller Thomas DiNapoli. NYC & Company, the city’s tourism arm, estimates that tourism won’t reach pre-pandemic levels until 2024.

The 2021 Rockefeller Center Christmas Tree being pulled into place this month.

Photo: Dieu-Nalio Chery/Associated Press

Hotel owners have been hoping that foreign visitors—who this month were allowed to enter the U.S. with proof of vaccination—would flock back to the city as its main attractions resume. The Macy’s Thanksgiving Day Parade is open again to the public, while the Radio City Rockettes are heading back to the stage. Vaccinated revelers can return to Times Square to watch the ball drop on New Year’s Eve.

Foreign tourists are important because they tend to stay longer and spend more money than domestic visitors. Chinese tourists are among the highest spenders, according to the comptroller’s office, but China currently requires its citizens to quarantine for weeks after returning from overseas, making it unlikely a significant number will visit New York City in the coming months.

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International flight bookings to New York City for November were 45% lower as of Nov. 15, compared with where booking volume stood at the same point two years ago, according to travel-analytics company ForwardKeys. Bookings for December were 33% behind 2019, the company said.

Some hotel owners said pent-up demand from domestic travelers has been keeping some New York City hotels afloat. At the Knickerbocker, a luxury hotel in Times Square, occupancy and the average-daily room rate are close to 2019 levels, said Shannon Knapp, president and chief executive of the Leading Hotels of the World, which represents the Knickerbocker and three other luxury hotels in Manhattan.

“Right now I’m feeling good about where we are for the holidays,” she said.

Still, a poll conducted a few weeks ago by Morning Consult for the American Hotel & Lodging Association found only a third of Americans are likely to travel for Christmas and even fewer will be on the road for Thanksgiving. Of those travelers, fewer than a quarter planned to stay in a hotel.

Gansevoort Hotel Group, which owns a hotel in the Meatpacking district, said a challenge for hotel owners is that visitors are reserving rooms on short notice.

Photo: David Mitchell

A major challenge for hotel owners is that visitors are reserving rooms on short notice, often within two weeks of traveling.

Michael Achenbaum, president and founder of Gansevoort Hotel Group, which owns a 186-room luxury hotel in the Meatpacking district, said this short booking window makes it harder for hotel owners to anticipate occupancy and raise rates accordingly.

Mr. Achenbaum was able to require at least two-night bookings during the first weekend in November, the first minimum-stay requirement since the start of the pandemic. The hotel, which underwent a $30 million renovation last year, sold deluxe king-bed rooms for $855 a night this month. Demand has been lower than Mr. Achenbaum would like.

“People are reluctant to overcommit,” he said.

Earlier

Travelers who met certain requirements were allowed to enter the U.S. beginning Nov. 8. WSJ’s Allison Pohle explains what these new rules mean. Photo: Seth Wenig/Associated Press The Wall Street Journal Interactive Edition

Write to Kate King at Kate.King@wsj.com