New York City is considered the financial capital of the world, with international banking and investment institutions generating year-round commercial demand. It is also an international cultural destination, drawing leisure travelers by the millions each year. As such, New York City has historically been among the top-performing lodging markets in the United States. While demand fundamentals have remained strong, RevPAR has moderated in recent years due to the influence of new supply. Overall, nearly 35,000 rooms have entered the market since 2007, with the pace of supply growth accelerating notably in 2014 as projects conceived in the context of the strong recovery of 2011 and 2012 came to fruition. As a result of supply increases, hotel operators relied more heavily on price as a marketing tool, accepting more discounted business to supplement traditional, higher-rated demand sources. Notably, however, different submarkets within the city have achieved results that vary, in some cases significantly, from the aggregate market performance. For example, hotels in more prime Manhattan locations and the less price-sensitive luxury segment have registered more favorable performance than the market average; conversely, tertiary submarkets and older hotel properties that lack strong brand support have registered notable declines in recent years.

The NYC market was hard hit by the pandemic; high rates of infection initially, strict restrictions, and the closure of the convention center and offices caused all demand segments to decline. Leisure demand began to return in April 2021, a trend that strengthened until December 2021. However, the emergence of COVID-19 variants and the city's vaccination requirement for indoor establishments resulted in softer leisure demand from December 2021 into early 2022. Restrictions were lifted in March 2022, and corporate travel began to return gradually. Meeting/group demand strengthened, due in part to small and medium-size meetings/events. The newly renovated and expanded convention center also hosted numerous sizeable events in 2022, and strong convention activity is expected going forward. International travel also increased in 2022, and a full market recovery will require the continued return of this demand source. In 2022, ADR exceeded the level achieved in 2019, while occupancy's gains were slower; as such, market RevPAR nearly reached the 2019 level. Although the supply pipeline remains dense, the pandemic-related hotel closures and building-use conversions, along with the cancellation of other projects, should mitigate the impact of new supply. NYC's role as an international center for business and tourism should allow the market to regain pre-pandemic RevPAR levels.

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