PwC: Upscale Properties In NYC Saw Sharpest Q1 RevPAR Decline
NEW YORK—PwC has released its “Manhattan Lodging Index: Q1 2020.”
In March 2020, the COVID-19 pandemic swept the nation, and brought a stay-at-home order to Manhattan. During the month, more than 60 hotels were temporarily closed and many others were repurposed as hospitals in an extraordinary attempt to combat the virus. As a result, first quarter RevPAR experienced a year-over-year decline of 29.1%. This represents the largest first-quarter decline in RevPAR since Q1 2009 when the financial crisis led to a year-over-year decrease of 32.5%. While occupancy posted marginal increases during the first two months of the year, a 63.4% decline in occupancy in March and a 15.2% decline in ADR drove the overall decline in RevPAR for the first quarter.
Of the four market classes tracked, upscale properties exhibited the most notable year-over-year decline in RevPAR during the first quarter, decreasing by 31.8% from prior-year levels. For upper-upscale hotel properties, where occupancy fell 24.7%, Q1 RevPAR was down 30.5%.
Luxury and upper-midscale properties posted lower declines in RevPAR of 26.0% and 25.9%, respectively, with double-digit declines in occupancy of 24.1% and 18.0%, respectively.
During the quarter, all five Manhattan neighborhoods experienced year-over-year declines in RevPAR as occupancy and ADR fell across the city. The Midtown East submarket led with the largest decline in RevPAR of 33.4%.
“If there’s one bright light coming out of this economic shock for existing Manhattan hotel operators, it’s that the supply of both existing hotel rooms and those under development is expected to decrease in the near term,” said Warren Marr, U.S. hospitality & leisure managing director, PwC.