Stephen Rushmore
President & Founder, HVS Hospitality Services

For 2006, New York City can once again boast of its status as the Number One U.S. market in terms of RevPAR! While the occupancy level for Manhattan hotels remained fairly stable, at 85%, for 2006, average rate continued to record double-digit increases month after month, ending the year 13.4% over the previous year. Though rate gains were more modest than those of 2005, they continued to soar in selected segments and locations, including hotels in the Times Square area as well as Midtown luxury properties.

With occupancy levels close to maximum capacity, it would be anticipated that the sky is the limit in terms of average rate; however, hoteliers are experiencing increased rate resistance, particularly from the commercial, and meeting and group segments. Thus, rate gains in the near term are expected to moderate, while still remaining quite healthy. As the housing boom continues to be sluggish, developers are re-evaluating residential projects and contemplating hotel projects, resulting in a multitude of new players on the Manhattan hotel scene. Included in this mix are out-of-state and foreign developers eager to invest in New York City, which has resulted in the largest-ever construction pipeline in Manhattan. Activity is particularly strong in Chelsea and Downtown Manhattan, and the World Trade Center site redevelopment is expected to result in strong future demand gains. Considering the current climate, HVS forecasts a soft landing for the Manhattan market, with minor declines in occupancy and softer average rate growth in the near term. Manhattan hotel values set a new record in 2006, exceeding the $1 million mark per key. Istithmar purchased the W Union Square for roundly $1.1 million per room in October 2006, and acquired an interest in the Mandarin Oriental for roundly $1.4 million per key in February 2007. In 2006, values increased from 20% to 30% compared to 2005 levels. Overall, we anticipate Manhattan hotel values to level off by the end of 2007.

Michael R. Bloomberg
Mayor of the City of New York

It is a pleasure to welcome everyone to New York University�s 29th Annual International Hospitality Industry Investment Conference. As the �World�s Second Home,� New York City appeals to business and leisure travelers from every corner of the globe. In fact, 2006 was a banner year for tourism in our City, with an estimated 44 million men and women visiting the Big Apple.

Millions of people are discovering the rich diversity of our cosmopolitan city. New York accommodations, attractions, dining, entertainment, shopping, sporting events, theater and performing arts are the best in the world. From first-time visitors just discovering the Empire State Building and Broadway to seasoned veterans exploring more of our diverse, exciting neighborhoods, our City presents endless possibilities.

New York is also seeing significant growth in international travel � in 2006, we welcomed an estimated 7 million visitors from Mexico, China, Brazil, India, Russia, Japan, and everywhere in between. There�s never been a better time to visit the greatest City on earth, and I know that we can meet our ambitious goal of receiving 50 million visitors by 2015. Please accept my best wishes for an enjoyable and productive conference!

Jonathan M. Tisch
Chairman & CEO, Loews Hotels
Chairman, NYC & Company

The state of New York City's travel and tourism industry is very strong.

Last year, we welcomed a record 44 million visitors, a clear sign that the industry remains a cornerstone of the city's vibrant economy. With very high demand, hotel inventory continues to increase in all five boroughs. By the end of 2006, there were 71,325 rooms in active inventory, a net gain of 1,000 rooms after the last of the condo/conversion and sale transactions was closed.

And the outlook for 2007 is also quite positive, with as many as 2,000 new rooms this year and another 1,500 to 2,000 net in 2008, bringing the city's total to over 75,000. Add to that the exciting infrastructure, waterfront, and other improvements underway throughout the city, and the future continues to look bright.

George Fertitta
CEO, NYC & Company

New York City's tourism industry is enjoying record success, having welcomed a projected 44 million visitors to the city last year. And with our global international expansion well underway, NYC & Company is uniquely positioned to achieve 50 million visitors by 2015. Hotel occupancies and room rates are at all-time highs, and we expect 13,000 new or renovated hotel rooms to come on line by 2010. All of this points to a vitality within the city's $24-billion travel and tourism industry.

Lalia Rach, Ed.D.
Associate Dean and HVS Chair, The Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management
New York University

To paraphrase a famous song - New York, New York is a heck of a hotel town! The expansion of brands, the development of new concepts, and the refurbishment of notable landmarks define 2006 as a stellar year. With every area of Manhattan experiencing record returns, the hotel industry continues to benefit from being the place to be, to see, and to conduct business.

Mark Lomanno
President, Smith Travel Research

New York City hotels experienced another very strong year in 2006, as occupancy levels remained high, at over 82 percent. This historically high level of performance was punctuated by very modest growth in new room supply and stable room night demand. Over the past several years, New York City hotels have benefited from actual declines in room supply. In fact, the recent additions to supply have only brought the number of rooms in the city to levels that existed early in the decade. With supply growth stagnant during the current economic boom, room night demand has surged, driving occupancies up to these very high levels.

With market-wide occupancy at these levels, hoteliers are have been able to raise room rates fairly aggressively over the past three years. For the past 30 months, annualized room rate growth has exceeded 10 percent, resulting in double-digit RevPAR growth for an even longer period of time. Needless to say, this has created a very favorable market for hotel operators and owners. With barriers to entry remaining very high, the long-term outlook for new additions to room supply remains very benign. In the absence of an economic downturn, demand is likely to remain robust, which is almost certain to create an operating environment in which hotel operators in the city will be able to maintain their aggressive pricing strategy of the past several years.

Joseph Spinnato
President & CEO, Hotel Association of NYC

The year 2006 was tremendously successful for the hotel industry in New York City. Projections for 2007 would seem to indicate that our town will continue to be a significant destination for people from all over the world. Mayor Bloomberg's commitment to the Travel & Tourism Industry by earmarking millions of dollars to NYC & Company will prove to be an even greater boom as NYC & Company endeavors to lure more visitors to our city.

Plans are proceeding with regard to the expansion of the Jacob K. Javits Convention Center, and we are enthusiastic over Governor Spitzer's review of the expansion. We hopefully look forward to an even bigger and better convention center as a result of the Governor's review.

All in all, 2007 looks like another banner year. Welcome to NYC.

Donna Quadri-Felitti
President, HSMAI Big Apple Chapter

Today's sales and marketing professional faces ever-increasing complexities in both the required breadth and depth of distribution and brand management. The members of HSMAI Big Apple who participated in the HVS-NYU Manhattan survey reveal their appreciation of the necessity to keep product fresh and current and their role in understanding the trends, economic cycles, and competitive challenge of travel, tourism, and hotel management in Manhattan. Our sales, marketing, and revenue management professionals are clear about the sophistication of marketing's critical contribution to enhancing the greater asset valuation of hotel investments in New York City.