NEW YORK CITY-Thanks to the introduction of new brands and developers breaking ground on new projects, Jones Lang LaSalle estiamates that the number of hotel rooms in Manhattan will swell by approximately 10% to more than 90,000 by the end of next year.
This hefty increase in new product has some industry analysts questioning aloud whether the city can absorb the added hotel rooms without causing hotel room rates to decline, according to the Wall Street Journal.
Richard Born, principal of BD Hotels that owns and operates 25 hotels in New York, says he is worried that the new supply could be a negative for the market. He predicts hotel occupancy rates will fall beginning next year due to the expansion of new hotel product at a clip of 6% to 8% a year. At the same time he notes that city tourism is rising at a rate of between just 4% to 5%.
"That could put downward pressure on daily rates or cause new hotel construction to slow," he says. See story in the Wall Street Journal.
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