No other sector in commercial real estate is suffering as badly right now as the hotel industry
In June, the average occupancy rate nationwide was 54.6 percent - by far the worst performance since Smith Travel Research of Hendersonville, Tenn., began keeping track in 1987. Distress is rampant, with increasing numbers of hotel owners surrendering control of their properties to their lenders.
As often happens, however, the Manhattan hotel market is a special case. Hotels in Manhattan also lost business in the financial crisis. But in April, rooms began filling up, sending the occupancy rate back over 80 percent. In July, 83.3 percent of the rooms were filled, a 5.6 percent decline since last year but still the highest occupancy rate in the nation, preliminary Smith Travel data shows.
But to attract business, Manhattan hotel operators have slashed room rates by nearly one-third since last year, to an average of just under $200 a night. 'I know I could come across sounding like the convention bureau, but New York really is a good buy right now,' said John A. Fox, a senior vice president at the New York offices of PKF Consulting, a national research and hotel advisory firm.
Though bargains can be had all over the country, the national decline in room rates from June 2008 to June of this year was a much more modest 9.7 percent. Analysts say that is because room rates in most places never soared the way they had in Manhattan. Nationally, the average rate was $96.77 a night in June.
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Source - New York Times
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