Your Negotiation Game: You’re not just competing with
corporate travel volume in New York. Leisure volume, groups and meetings are
where hotels are really making hay, and it’s may be more difficult to leverage
volume discounted corporate travel next to non-discounted leisure rates, especially
when such travelers have also proven they are willing to spend on dining, spa,
shopping and other opportunities onsite. All that works against corporate
buyers, which may be one reason BTN’s Corporate Travel Index saw such steep
increases for business travel in the city moving from Q3 into the Q4 holiday season.
One Approach: Small and midsize programs might do
well to approach boutique properties in popular New York neighborhoods that are
close to offices or other meeting venues. Negotiating and promoting unique amenities
and locations has been an effective strategy for some SMEs—especially those with
young, experience-oriented travelers who haven’t yet established specific
loyalty or preferences with bigger brands.
Keep In Mind: New York has experienced spiking occupancy
rates, quarter over quarter. PwC’s recent market analysis showed average hotel occupancy
at more than 89 percent in the fourth quarter, and the consulting company doesn’t
expect that to reduce significantly. Occupancy and rate growth may “moderate,”
however, according to PwC, with new inventory coming online in 2025
What’s Happening in the New York Market
Among new Manhattan hotels slated to open this year are the
51-story, 379-room Hotel Meta, part of Marriott's Tribute Portfolio, and a
529-room Kimpton property, each in Midtown, according to PwC. The 120-room Faena
will open with views of the High Line and the Hudson River on the city’s West
Side. The 145-room Plaza Athenee Nobu will debut on the Upper East Side and the
175-room Xadia hotel will open by Bryant Park.
The New York hotel pipeline, according to hotel market
analysis firm STR, is the most active of any city in the United States. The
above properties represent just a fraction of the more than 5,700 rooms slated
to come into the New York market in 2025. But demand in the market isn’t
slowing down.
The city welcomed 65 million tourists—including business
tourists—in 2024. The data from the New York State Comptroller’s Office projects
that the city is on track to host 68 million tourists in 2025.
Tourists high and low are competing for hotel room availability
in the city—even those leisure tourists who might otherwise have opted for an
Airbnb or other short-term rental property are now looking to the city’s
compressed hotel market for lodging. New York’s more stringent regulations placed
on short-term rental providers as of September 2023 require renters to be
present at the property during stays and limits rentals to two guests.
While the intent was to free up long-term housing
opportunities during the city’s housing crisis, Airbnb and some local business
officials have suggested the regulations have backfired by reducing hyperlocal tourists
who spend money in small neighborhood shops and restaurants.
At the same time international arrivals to New York have increased.
Approximately 13 million international tourists arrived in New York in 2024, up
from 11.6 million in 2023 and surpassing the pre-Covid levels of international
arrivals.