NYC tourism is still struggling, and it’s keeping inflation at bay
The sluggish recovery of New York City tourism offers one bright spot — it appears to be keeping some costs that have spiked nationwide in check in the Big Apple.
In cities across the country, higher prices for airfare, hotels, restaurants, car rentals and other items all made it more expensive to be a tourist.
But with travel to New York City still far below pre-pandemic levels, there doesn’t appear to be the same price pressure building in Gotham as in other cities.
Earlier this week, the Labor Department announced that its Consumer Price Index, which measures a basket of goods and services as well as energy and food costs, jumped 5.4 percent in June from a year earlier.
But the New York City area lagged the nationwide number, rising just 4.1 percent from last June.
Of the cities tracked by the feds, only Los Angeles saw a smaller jump in prices over that period. Atlanta, urban Alaska, St. Louis and Seattle all saw year-over-year spikes in prices above the national average.
The national average cost of a night in a hotel, for example, spiked a whopping 16.9 percent from a year earlier.
The feds don’t provide comparable data broken out by city, but the president and CEO of the Hotel Association of New York City, Vijay Dandapani, told Crain’s New York that there’s just not enough demand to see costs rise like that in New York City right now.
“As long as occupancy is below the 85 percent level we had prior to COVID, there is not enough compression to drive rates up,” he told the outlet.
For the week ending July 10, visitors didn’t come close to filling rooms at that level, Crain’s reported, with occupancy at just 65 percent.
Earlier this month, an analysis conducted by the American Hotel & Lodging Association found that New York City was one of just seven large cities whose hotel industry was still described as in an economic depression — along with San Francisco, Boston, Washington, DC, Chicago, Seattle and Minneapolis.
New York hotel revenues per available room were still 67 percent lower in May compared with May 2019, the analysis found.
Dandapani at the time told The Post that the industry is still hurting from international travel restrictions as well as concerns about raging gun violence across the city.
“We need international borders to reopen to travel. Security and safety is an issue as well. The atmosphere needs to change,” he said.
He added that the average revenue per hotel room in the city has plummeted by $140 — from $260 pre-pandemic to $120 now.
With travelers still not yet flocking back to New York City, that’s likely keeping the cost of other items that surged on a national level down in the Big Apple.
Interest in visiting New York appears to be on the rise, though. Google search interest for flights to New York has risen substantially in recent months.
But Nicholas Colas, co-founder of DataTrek Research, told Crain’s that the return of European travelers will be key to the rebound of New York City’s hospitality sector.
“It’s coming back,” he said. “Not at 2019 levels but getting there. European tourists are not yet allowed to visit this county, though the federal government will have to renew that ban later this month. Visitors from the United Kingdom used to provide New York City’s highest share of international tourists.”
