The State of the NYC Hotel Market (by CoStar Group)

🗽 NYC Hotel Market Outlook: What Sellers & Marketers Should Know

As we dive into the second half of 2025, NYC remains one of the most dynamic hotel markets in the country—but it’s a tale of mixed signals. This breakdown of Jan Freitag’s latest hotel outlook is tailored for hospitality pros looking to stay sharp, steer strategy, and seize opportunities.

🔍 The Macro Picture: Bumpy, But Holding

• National RevPAR is forecasted to grow just 1% this year, largely fueled by rate (ADR) rather than demand.

• Occupancy is plateauing, with the U.S. hovering just under 63%—a slight drop from 2024.

• Economic caution is weighing on travel, especially among price-sensitive domestic leisure travelers.

💸 NYC: Rate-Driven Success Story

• Despite national softness, NYC ADR is holding strong, projected to grow 1.5% in 2025 after a stellar 5.8% rise in 2024.

• Occupancy is high at 84.6% YTD, driven by consistent urban demand and pricing power.

• Luxury and Upper-Upscale segments are outperforming, with RevPAR up 10.4% and 6.6%, respectively.

🌎 International Demand: A Soft Spot

• Inbound international travel to the U.S. is down 8% from 2019, and further declining year-over-year.

• Issues like limited airlift from Europe and Canada (e.g. cuts by Lufthansa, British Airways) are cooling global interest in NYC.

• Sellers targeting international segments should adjust expectations and diversify feeder markets.

🧳 Segments & Trends to Watch

• Weekday occupancy is flat, while weekend demand is growing, highlighting changing travel patterns and the continued strength of leisure-driven city breaks.

• Group and transient room nights are still below 2019 levels, but ADR continues to climb, especially in the premium space.

✈️ Airline Clues = Hotel Insights

• U.S. airlines report consistent weakness in Main Cabin bookings, especially for domestic leisure.

• However, premium cabin demand remains resilient, with wealthier travelers still willing to pay for experience—mirrored by luxury hotel performance.

🏗️ NYC Pipeline: Growth Is Not Over

• NYC has 19,100 rooms under contract, with 8,300 currently under construction.

• Most of this growth is concentrated in Luxury and Upscale segments, potentially intensifying competition at the top.

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