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Hotel Association of New York City slams CBRE report

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The town’s lodge trade didn’t roll out the welcome mat for a sunny forecast from CBRE which claimed that pandemic-battered inns are doing simply high quality.

Resort Affiliation of New York Metropolis president and CEO Vijay Dandapani threw shade on the true property firm’s rosy forecast as his group lobbies for an enormous lower within the metropolis’s lodge occupancy tax from 5.875 % to 2.875 — in addition to for diminished property taxes.

Lawmakers are more likely to be much less receptive to the pitch if accommodations are in higher form that latest gloomy experiences have urged. However as in most information comparisons, there’s some fact to each views.

Dandapani mentioned CBRE’s survey, which The Put up reported on Tuesday, was off base in predicting a return to pre-pandemic occupancy and income by 2024.

“We’re cheerleaders for town, however there’s a niche between expectations and hope,” Dandapani mentioned.

The optimistic prediction was written by Dan Hanrahan, CBRE senior vice-president of Lodges Advisory for the northeast. Dandapani mentioned that Hanrahan’s forecast that  revPAR  — or income per out there room, a key trade metric — would “leapfrog again to 2019 numbers” this yr was “most unlikely.”

Baccarat Hotel
The Resort Affiliation’s personal information for the primary 5 months of 2022 present common revPAR for this yr, nonetheless effectively beneath 2019 — $155 in contrast with $184 earlier than the virus struck.
Annie Wermiel/NY Put up

If it does, “We will all purchase a drink at Christmas,” Dandapani deadpanned.

CBRE based mostly its cheery forecast on information from this yr’s first quarter, which confirmed upticks in occupancy ranges, room charges and revPAR.

The Resort Affiliation’s personal information for the primary 5 months of 2022 present common revPAR for this yr, though rising on common from 2021 lows, nonetheless effectively beneath 2019 — $155 in contrast with $184 earlier than the virus struck.

“As a way to catch up, revPAR must significantly exceed the present $155 for the remainder of the yr. Crossing the chasm just isn’t inconceivable, however it’s unlikely,” Dandapani mentioned.

Furthermore, he mentioned that revPar in 2019 and in 2022 have completely different meanings, on condition that town’s lodge rooms shrunk from about 122,000 in 2019 to round 100,000 right now.

Luxurious-class inns such because the Baccarat, the St. Regis, Pierre and the 4 Seasons downtown are outperforming cheaper properties, he mentioned.

The Pierre Hotel
Luxurious-class inns like Pierre (above) are outperforming cheaper properties, Dandapani mentioned.
Angel Chevrestt

However many accommodations in any respect worth factors stay closed — from top-tier 4 Seasons on East 57th Road, to the mid-market  Marriott Eastside on Lexington Avenue, to finances lodgings in Chelsea and the Far West Facet.

“Most elected officers are pushing for  altering closed accommodations to housing,” Dandapani mentioned. “What meaning is, there are a  lot of closed accommodations” — and the losses haven’t been absolutely offset by latest openings such because the Laborious Rock and Riu accommodations close to Instances Sq..

Different troubling “headwinds” embody the sluggish return of worldwide enterprise journey and the near-complete lack of guests from China and Brazil.

However Dandapani acknowledged at the very least one promising very important signal. Requested how a lot visitors had been paying per room right now in contrast with pre-pandemic days, he mentioned final week’s common value throughout all lodge lessons was $263 — “inside 5 %, inside putting distance, of 2019,” he mentioned.