PwC’s Manhattan Lodging Index for Q2 2021 found that increases in occupancy, average daily rate and revenue per available room accelerated across Manhattan during the quarter as the vaccine rollout gained traction and the city began to relax COVID-19 restrictions. Not surprisingly, second-quarter RevPAR experienced a year-over-year increase of 103.4 percent, heavily weighted to performance during the month of June.
“While RevPAR continued to rebound in Q2, Manhattan hotels have a long way to go before recovering to prepandemic levels,” said Warren Marr, U.S. hospitality & leisure managing director at PwC. “For 1H 2021, RevPAR was still down 65.2 percent from the same period in 2019, compared to down 71.2 percent for all of 2020. The Delta variant has contributed to a slowing in office reopenings across the city, leaving performance for the second half of this year in question.”
In addition to the RevPAR improvement, occupancy and average daily rate both gained ground over the quarter, which the report credits to relaxing mandates and restrictions. Year-over-year increases in occupancy were highest in June, up 54.6 percent. With overall occupancy for the quarter at 52 percent and ADR at $183.95, Manhattan RevPAR doubled from $47.02 in Q2 2020 to $95.65 in Q2 2021.
Of the five Manhattan neighborhoods surveyed, all experienced year-over-year increases in RevPAR with occupancy and ADR growing across the island. Upper Manhattan had the largest increase in RevPAR—up 242.1 percent, driven in large part by a 194.3 percent increase in ADR year-over-year. Lower Manhattan RevPAR grew 199.2 percent, driven by a 90.9 percent increase in occupancy. Midtown South and Midtown West posted increases of 80.2 and 80 percent, respectively. Midtown East had the smallest increase in RevPAR—up 76.8 percent.
Market by Market
Of the four market classes tracked, luxury properties exhibited the most notable year-over-year increase in RevPAR to $209.42—up 584.9 percent for the quarter, driven by a 230.8 percent increase in occupancy from 12.9 percent in 2020 to 42.7 percent, and a 107.1 percent increase in ADR from $236.72 to $490.20. For upper-upscale hotel properties, where occupancy grew 26.9 percent and ADR increased 32.4 percent, Q2 RevPAR finished the quarter up 68 percent to $79.68.
Upscale and upper-midscale properties posted relatively lower, but still significant increases in RevPAR of 55.8 and 55.4 percent, respectively. With lower increases in ADR of 14.8 and 1.5 percent, respectively, RevPAR finished the quarter at $76.54 and $79.95, respectively. Of note, upper-midscale properties beat out upper-upscale in RevPAR for the quarter.
During the second quarter, RevPAR at full-service hotels proved to experience more significant occupancy and room rate growth compared to limited-service hotels. With year-over-year increases in occupancy of 48.0 and 40.1 percent, respectively, and increases in ADR of 49.8 percent and 22 percent, respectively, RevPAR increased 121.6 percent for full-service properties while limited-service hotels saw an increase of 70.9 percent over the same period.
For chain-affiliated and independent hotels, second quarter RevPAR grew 84.3 and 128.3 percent, respectively, driven primarily by increases in ADR of 38.1 and 54 percent.