The Big Apple’s hotel industry is making a bust-to-boom post-COVID comeback — thanks in large part to the migrant crisis.
Industry bigs tell The Post that business people are looking to buy hotels or even open new ones — spurred by the big bucks the city is having to drop on accommodating asylum-seekers at them, as well as a related dearth of rooms for tourists.
“Who would have thought that hotels would be perceived as a darling asset class compared to office buildings?” said Daniel Lesser, CEO of LW Hospitality Advisors, at a New York Hotel & Hospitality conference held at the New York Marriott Marquis last week, host bisnow.com reported. “That’s what’s happening now.”
Just a few years ago, the COVID-19 outbreak devastated the hotel sector, with travel bans and lockdowns leaving thousands of rooms empty, causing a massive loss of revenue that triggered bankruptcies and closures.
The city’s flood of migrants is helping to change that, with more than 100 hotels now contracting with Mayor Eric Adams’ administration to fill up more 10,000 rooms with asylum-seekers.
Vijay Dandapani, CEO of the Hotel Association of New York City, told The Post there is a “small subset of prospective and current hotel owners” who are considering jumping on the opportunity and buying hotels or opening new ones.
He said the migrant situation “has certainly helped the industry overall due to `compression’ brought about by hotel inventory being taken off the transient market.”
Two major Manhattan hotels — the Roosevelt in the Grand Central Terminal area and the Holiday Inn in the Financial District — have already been converted to migrant shelters for the foreseeable future, while Dandapani said most other hotels are providing space on a month-to-month basis.
The conversion of the iconic 1,000-room Roosevelt into a migrant shelter couldn’t have come at a better time for the facility.The Roosevelt closed during the pandemic and remained mothballed until its owners reached a deal with city officials to become a so-called Humanitarian Emergency Response and Relief Center.
The city entered into an overall $275 million contract with the hotel association earlier this year that set aside 5,000 hotel rooms for migrants.
“We stand ready to do it as long as needed and as long as hotels voluntarily agree to serve this market, which is the case now,” Dandapani said of the pact.
But Dandapani cautioned there are still fewer hotel rooms now than pre-pandemic and that the industry’s business from tourism has not fully recovered, especially compared to other international cities.
The city hotel occupancy rate was still down 12 percentage points in 2022 compared to 2019 and for the first six months of this year is trailing 2019 by an average of 5 points, according to the hotel association
.
“Paris and London, our principal competitors, were ahead of 2019 numbers in 2022, Paris by 15% and London by 7%, whereas NYC was behind 2019 for the year ending 2022,” Dandapani said.
There also are 118,000 hotel rooms in the city now compared to 124,000 before the pandemic, according to the hotel association.
Still, revenue per room is higher than before the pandemic, thanks to the tighter inventory from the migrants and overall fewer spaces.
The Holiday Inn is charging the city $190 per room per night, nearly double the $102 it charged on the market earlier this year, according to court records.
The question now is, what happens if and when the migrant crisis subsides.
Dandapani said New York’s anti-business climate remains a problem, calling the property tax on hotels the highest in the nation.
City Hall had no immediate comment.
A staggering 93,200 asylum-seekers have arrived in the city since spring 2022 — with more than 2,500 still pouring in weekly.
Adams issued yet another desperate plea for federal help last week. saying, “We have stepped up and led the nation, but this national crisis should not fall on cities alone to navigate.
“We need a national solution here,” said the mayor, who has ripped fellow Dem and President Joe Biden for failing to help.
Last week, 54 other city Democratic lawmakers sent a letter to Biden demanding that the White House step up to help the Big Apple with federal assistance and better control the flow of migrants at the US-Mexico border.
Instead, team Biden only promised a federal liaison — and no additional funds. The paucity of support drew backlash from local lawmakers, who complained the president was ignoring the city’s plight.
This story originally appeared on NYPost
