**New York City Hotel Prices Soar, Leaving Travelers Reeling**
For a Friday night stay at a Hilton in Times Square, the price tag is $537, including a $35 daily “destination charge.” A night at Hotel Indigo in Lower Manhattan costs $414, while the Aloft Hotel near LaGuardia Airport in Queens charges $351.
New York City has always been known for its high costs, but travelers are now facing unprecedented sticker shock as hotel rates surge, particularly with the holiday season approaching.
In September, the average cost of a hotel room in the city hit $417—the highest monthly rate recorded by CoStar, a real estate analytics firm, since it began tracking data in 1987. During the same period, only Maui had more expensive hotel rates.
While luxury hotels in Manhattan often exceed $1,000 per night, with a king room at the St. Regis New York costing $1,854 on a November weekend, the overall rise in prices reflects a broader trend. Tourists are returning in droves, reviving an industry that came to a standstill during the pandemic.
### Tourism Booms Despite High Prices
New York City Tourism + Conventions, the agency promoting the city as a travel destination, doesn’t believe the high rates are deterring visitors. The agency estimates nearly 65 million people will visit the city this year, just shy of the 66.6 million who came in 2019. By 2025, that number is projected to surpass 68 million, setting a new record.
However, some travelers are adjusting their plans. Many are opting to stay in New Jersey, Long Island, or with friends to avoid the steep costs. Others are postponing trips until after the holiday season, when prices typically drop.
Rahul Chhibber, a 32-year-old visitor from London, dreamed of staying in Manhattan for his 10-day trip this fall. But after seeing the prices, he expanded his search to the suburbs. He eventually booked an Airbnb in Yonkers for $130 a night, near a commuter rail station.
“I don’t mind spending the money when it’s worth it,” said Mr. Chhibber. “But I don’t understand how normal people can go there, especially if they have kids.”
### Travelers Adjust Plans
Jon Lee, a 23-year-old student from the University of Colorado, visited New York City five times in the past year to see his brother, who works at a Michelin-starred restaurant in Midtown Manhattan. For one planned December trip, he postponed his visit because the cheapest Manhattan hotel he found was $600 a night at a Holiday Inn. By February, rates had dropped to $200–$300 per night.
During other visits, Mr. Lee stayed with friends or his brother. When traveling with family over the summer, they opted for a Hyatt in Jersey City, N.J., to save on costs. “I knew New York City was expensive,” he said. “But I didn’t expect the most affordable options to be $600.”
Similarly, Elijah Krain, 24, and his girlfriend planned to attend the U.S. Open in Queens this August but balked at hotel prices. “Anything we saw online was a couple hundred dollars a night,” he said, “or advertised as affordable, but fees pushed it into the $300–$400 range.” The couple ended up staying at a family friend’s apartment in Manhattan.
### Why Are Prices So High?
Richard Born, a hotel developer who operates 24 properties in New York City, including the Bowery and the Ludlow, said hotel rates have not risen beyond inflation over the past two decades. However, he noted that hotels charge more during peak seasons to make up for slower periods.
“New York City is not much more expensive than the other three or four premier markets in the United States, and it’s still materially cheaper than Europe,” Mr. Born said. “Were it not for the $400 rate in October, you could not survive.”
The pandemic’s impact on tourism also plays a role. In the early months of COVID-19, travel came to a halt, and hotel prices plummeted. Now, with tourism rebounding, mid-scale hotel rates have jumped more than 50% since fall 2020, according to CoStar.
Despite the high prices, demand remains strong. In September, 91% of hotel rooms in the city were occupied, a level comparable to pre-pandemic times.
### Supply and Demand Challenges
Experts say rising hotel rates reflect broader trends in hospitality and travel costs, but New York City faces unique challenges.
The city’s hotel inventory has shrunk due to an influx of migrants, with struggling hotels repurposed to house them. Over the summer, about 11% of the city’s 136,000 hotel rooms were allocated for this purpose.
Additionally, new laws have curtailed hotel development and restricted short-term rentals on platforms like Airbnb. More than 92% of Airbnb listings in the city were removed to comply with regulations limiting guests to two and requiring the property owner to reside on-site. Most of these listings were in boroughs outside Manhattan.
“It’s the law of supply and demand,” said Theo Yedinsky, Airbnb’s vice president of public policy. “New York can’t just be a place that the rich get to visit.”
While these restrictions benefit traditional hotels, Mr. Born expressed concern about long-term consequences. Limiting new inventory could push rates so high in the next five to 10 years that some tourists might avoid the city altogether.
A recently introduced City Council bill aims to loosen restrictions on short-term Airbnb rentals, allowing travelers to stay in one- and two-family homes.
### Labor Costs and Recovery
Another factor driving up costs is labor. Most hotel employees in New York City are part of the Hotel and Gaming Trades Council, a powerful union with one of the strongest contracts in the country. For example, front desk agents earn more than $30 an hour.
David Sherwyn, a professor at Cornell University’s School of Hotel Administration, pointed to the pandemic’s financial toll on the industry. “Hotel companies, like everyone else, are making up for lost time,” he said.
As New York City hotels continue to charge premium rates, travelers are left grappling with tough decisions: pay the price, stay farther away, or postpone their trips. For now, the city remains a destination that many aspire to visit—if they can afford it.
Source: nytimes.com