PwC: Manhattan hotel metrics improve in Q4 2022

According to PwC’s Manhattan Lodging Index for the fourth quarter of 2022, hotels on the New York City island reported increases in occupancy, average daily rate and revenue per available room during the second half of 2022.

Highlights from the report:

RevPAR increased 54.2 percent year over year during the fourth quarter. Occupancy and ADR continued to improve as group and corporate travel patterns began to normalize and the market experienced its first holiday season with limited pandemic-related restrictions since 2019. Year-over year increases in occupancy were highest in October—up 32.1 percent. With overall occupancy for the quarter at 82.7 percent and ADR at $376.37, Manhattan RevPAR jumped from $201.90 in Q4 2021 to $311.23 in Q4 2022.

Of the four market classes tracked, upper-upscale properties exhibited the most notable year-over-year increase in RevPAR—up 65 percent for the quarter, driven by a 30.1 percent increase in occupancy from 63 percent in 2021 to 82 percent in 2022, and a 26.8 percent increase in ADR from $281.11 to $356.51. For upper-midscale properties, occupancy grew 15.5 percent and ADR 41.6 percent, resulting in a year-over-year RevPAR increase of 63.5 percent. Upscale properties experienced similar RevPAR growth, posting a 61.6 percent increase, driven by a 14.9 percent increase in occupancy and a 40.6 percent increase in ADR. Luxury properties posted the smallest increase in RevPAR of 37.9 percent, attributable to an 18.4 percent increase in occupancy and the lowest increase in ADR among all market classes—up 16.5 percent.

Of the five Manhattan neighborhoods, Midtown East had the largest increase in RevPAR—up 65.8 percent, driven by a 29.8 percent increase in ADR and a 27.7 percent increase in occupancy year-over-year. Midtown West RevPAR grew by 64.3 percent, largely driven by a 32.1 percent increase in ADR. Lower Manhattan and Midtown South posted RevPAR increases of 35.1 and 54.5 percent, respectively. Upper Manhattan had the smallest increase in RevPAR—still up 30.7 percent—with average daily rate growth moderating.

During the fourth quarter, growth in occupancy at full-service hotels outpaced limited-service hotels, with year-over-year increases of 21.1 and 15.1 percent, respectively. RevPAR increased 54.5 percent for full-service properties and limited-service hotels saw an increase of 53.3 percent over the same period.

For chain-affiliated and independent hotels, fourth quarter RevPAR grew 56.7 and 48.4 percent, respectively. The improvement in chain-affiliated hotels was driven by stronger increases in both occupancy and ADR—up 20.9 and 29.6 percent, respectively, according to the report.