For travelers planning trips to New York City, be prepared to shell out more money than ever for a hotel.
In 2023, the average daily cost of a New York hotel room was $301 a night, a jump from about $278 a night in 2022, according to the commercial and residential real estate provider CoStar. And from January to March 2024, the average nightly hotel rate in the city was roughly $231, up from a $216 nightly rate during the same period last year.
But it’s not just an uptick in travel to New York City that is driving up prices. There’s the upending of the Airbnb rental market, inflation, and the slowdown in new hotel construction.
And, as The New York Times recently reported, the migrant crisis has also caused a jump in hotel rates. Many hotels began taking in migrants during the pandemic, some of them exclusively.
This has reduced the supply of available rooms and helped drive up prices for guests looking for accommodations across the city. According to the Times, about 135 of the nearly 700 hotels in New York City are now sheltering asylum seekers. Those hotels earn up to $185 nightly a room, according to the city.
No hotel that switched to housing migrants has yet to revert to a conventional hotel, the Times reported.
According to CoStar data, the hotels now sheltering migrants have cordoned off roughly 16,500 rooms from the available hotel supply, resulting in nearly 122,000 available rooms for travelers. There are now about 2,800 fewer rooms available for travelers in the city compared to right before the coronavirus pandemic.
“During peak periods, try getting a hotel on a Tuesday, Wednesday or Thursday night in midtown Manhattan, and, if you can, you could end up paying dearly,” LW Hospitality Advisors president and chief executive Daniel H. Lesser told the Times. “It’s all supply-and-demand related, and the migrant rooms have reduced the amount of supply.”
Immigration has emerged as a defining issue of the 2024 presidential campaign. Voters largely disapprove of President Joe Biden’s handling of the issue. Former President Donald Trump, meanwhile, is looking to use immigration to rally Republicans and Independents around his campaign.
Since 2022, more than 180,000 migrants have arrived in New York City — with tens of thousands sent by Texas Gov. Greg Abbott in protest of Biden’s immigration policies. Mayor Eric Adams has faced enormous financial and logistical challenges to house the migrants.
The New York City hotel market was hit hard in 2020 as business travel plummeted and the city — once the epicenter of the COVID-19 pandemic — struggled to recover due to the resulting economic fallout.
But the city’s hotel market picked up in a major way last year, and the city could see a $380 million bump in hotel revenue this year, according to The Wall Street Journal. If the projections prove to be accurate, it would be a stunning turnaround given the challenges faced by the travel industry throughout the pandemic.
