PwC: Manhattan hotel rates pull back in Q3

Photo credit: Getty Images/Sean Pavone

The growth of Manhattan’s soaring hotel rates slowed throughout Q3, according to a new report from PwC, but minimal increases in lodging supply and continued demand growth kept the city’s overall performance robust.

ADR growth in Manhattan fell 3.3 percent when compared to the prior quarter, partly as more price-sensitive leisure guests took precedence over business travelers during summer. However, ADR was still up 0.8 percent year-over-year, and Q3 occupancy reached 90.4 percent—the highest year-to-date occupancy for Manhattan hotels in the report’s 24-year history.

All Manhattan submarkets, aside from Upper Manhattan and Midtown West, recorded increases in RevPAR during the third quarter. Luxury hotels in the city saw occupancy fall to 83.4 percent, while ADR for the segment increased 3 percent year-over-year. Upper-upscale hotels recorded the only ADR decline in the city (down 0.7 percent) and also saw RevPAR fall 1.5 percent. However, upscale and upper-midscale hotels saw RevPAR increase 1 percent and 1.3 percent, respectively, according to PwC.

Virtual Event

Hotel Optimization Part 3 | January 27, 2021

With 2020 behind us and widespread vaccine distribution on the horizon, the second half of the new year is looking up, but for Q1 (and most likely well into Q2) we’re very much still in the thick of what has undeniably been the lowest point of the pandemic. What can you be doing now to power through and set yourself up for a prosperous 2021 and beyond? Join us at Part 3 of Hotel Optimization – A Virtual Event on January 27 from 10am – 1:05pm ET for expert panels focused on getting you back to profitability.


Limited-service hotels pulled in higher RevPAR than full-service properties during Q3, despite occupancy losses in the limited-service category. Overall, limited-service hotels saw ADR rise 1.5 percent while full-service hotels’ ADR increased 0.8 percent. 

In addition, independent hotels continue to out-perform branded properties in Manhattan. While occupancy fell for both chains and independents (down 0.4 and 1.1 percent, respectively), ADR increased by 0.1 and 1.9 percent, respectively, the PwC report noted.

Manhattan’s hotel transaction pace remained consistent with prior quarters, with six transactions closing between July and September. Most notable was the 282-room The Plaza Hotel, which was sold by Sahara Sahara India Pariwar, Ashkenazy Acquisition Corporation, Dream Hotel Group and Kingdom Holding Company to Kitara Hospitality, a subsidiary of Qatar’s sovereign wealth fund, for $600 million, or $2.1 million per key.

Just one Manhattan hotel opened in Q3, the 300-room citizenM New York Bowery hotel, which opened in September. Four new hotels have opened in Manhattan following the close of the third quarter, consisting of the Moxy NYC Downtown, Park Terrace, Aliz Times Square and AC New York Downtown.