New York City Hotel Rates Soar to Record Heights as Holiday Travel Nears
Rising Hotel Costs in New York City: A Traveler’s Dilemma #
New York City has never been a budget-friendly destination, but many travelers are now experiencing sticker shock due to high hotel costs, especially as the peak holiday tourism season approaches. A recent Friday night at a Hilton in Times Square cost $537, including a daily $35 destination charge. A night at a Hotel Indigo in Lower Manhattan was $414, while the Aloft Hotel overlooking LaGuardia Airport in Queens was $351. In September, the average hotel room price in the city climbed to $417, the highest monthly rate recorded.
Room rates in New York vary widely across hotel classes, with high-end properties in Manhattan often surpassing $1,000 a night. A king room at the St. Regis New York costs $1,854, including fees and taxes, on a Friday night in November. Despite these rising costs, tourists continue to fill the city’s streets, reviving an economic mainstay that had slowed during the pandemic. Nearly 65 million people are expected to visit New York this year, nearing pre-pandemic levels. However, some travelers have changed their accommodation plans, opting to stay outside Manhattan or with friends due to high prices.
For his 10-day trip, Rahul Chhibber, hoping to stay in Manhattan, faced high hotel prices. He stayed in an Airbnb in Yonkers, accessible to the city, for $130 a night. “I don’t mind spending the money when I know it is worth it. I don’t understand how normal people can go there, especially if they have kids.”
Jon Lee, who visited New York five times in the past year, postponed a planned December trip due to high rates. He found costs more affordable in February, around $200 to $300 a night. On other trips, he opted to stay with friends or in a Hyatt in Jersey City to reduce costs. “I knew New York City was expensive, but I didn’t expect the most affordable options to be $600.”
Elijah Krain and his girlfriend planned a trip from Philadelphia but opted to stay with friends when faced with high hotel fees. “Anything that we saw online was a couple hundred dollars a night, or advertised as affordable, and all of a sudden, all sorts of fees made it in the $300 to $400 range.”
A hotel developer noted that, on average, room prices have not exceeded inflation over the past two decades but acknowledged that this time of year, prices rise as hotels make the bulk of their revenue. The pandemic had reduced travel, making recent price hikes more pronounced. September saw a 91% occupancy rate citywide, mirroring conditions just before the pandemic.
The high demand for hotel rooms coincides with a reduced supply due to hotels accommodating migrants and strict new regulations on short-term rentals. Over 92% of Airbnb’s local listings were removed to meet new rules, limiting short-term rentals in the city. “It’s the law of supply and demand. New York can’t just be a place that the rich get to visit.”
The impact of these changes may lead to further long-term increases in hotel rates, potentially deterring tourism. A proposed bill could ease some short-term rental restrictions. Strong labor contracts in the hotel industry and lost revenue during the pandemic are also factors driving higher hotel costs as the industry seeks recovery.