NEW YORK—During the third quarter of 2019, RevPAR in Manhattan fell 3.1%, primarily due to declines in ADR. Growth in lodging demand didn’t keep up with a supply increase of 3.1%, resulting in occupancy falling 0.5%, according to PwC’s Manhattan lodging index.
“Manhattan hotels have seen RevPAR grow in only one of the first nine months of this year,” said Warren Marr, U.S. managing director, PwC. “Investor concerns over a possible downturn are rising, business spending is decelerating, and political uncertainty is increasing with the coming presidential election. It remains to be seen whether Manhattan hotels will benefit in the fourth quarter from the historically strong retail traffic that visits the city between Thanksgiving and Christmas.”
Across all Manhattan hotel classes, luxury properties exhibited the most notable decline in RevPAR during the third quarter.
Decreasing by 3.7% from prior-year levels, luxury RevPAR was largely driven by a decline in ADR of 2.7%. For upscale hotel properties, where occupancy fell by 0.8%, Q3 RevPAR was further impaired by a decline in ADR of 2.6%.
Upper-midscale hotels experienced a minimal decline in occupancy 0.1%, with ADR down 2.2%, leading to an overall decrease in RevPAR of 2.3%. Of the four hotel classes tracked, upper-upscale hotels posted the smallest decline in RevPAR, driven by a decrease in ADR of 1.9% partially offset by growth in occupancy of 0.5%.