Which sector of the hotel market, business travelers or tourists, is holding most steady?
Tourists are probably the most resilient. [They] are seeing great deals to come to New York. Not only are hotel rates way down, but the cost of travel is much lower than it was in the last three years. How are room rates faring in the luxury and budget sectors in New York? The most interesting trend in New York hotels is the way the different [sectors] or chain scales — luxury, upper-upscale, upscale, midscale and economy — are performing. All chain scales are losing about the same 30 percent RevPAR. However, luxury hotels’ RevPAR is falling 90 percent due to [declining] occupancy, while the bottom of the chain scale, economy and midscale hotels, are losing 90 percent of their RevPAR due to slashing rates. So we see the lower-end hotels keeping 90 percent occupancy and giving great deals to get there, while the luxury hotels are keeping their rates above $600 per night, but are running 50 percent occupancy. What are the biggest challenges in the hotel development market today? Raisin
