The following tables compare the performance of all reporting hotels in Manhattan from early in this decade through 2007. These results are categorized by neighborhood: Midtown West, Midtown East, Uptown, and Downtown.

Midtown West

Year	Average Daily Room Count	% Change	Occupied Room Nights	Change	Occupancy	Average Rate	% Change	RevPAR	Change
2002	29,242	—	8,108,395	—	76.0%	$182.73	—	$138.82	—
2003	30,026	2.7	8,390,953	3.5	76.6	179.88	(1.6)	137.72	(0.8)
2004	29,868	(0.5)	9,161,733	9.2	84.0	200.33	11.4	168.35	22.2
2005	29,117	(2.5)	9,056,684	(1.1)	85.2	234.07	16.8	199.47	18.5
2006	28,893	(0.8)	8,983,717	(0.8)	85.2	262.28	12.1	223.43	12.0
2007	29,291	1.4	9,274,114	3.2	86.7	295.21	12.6	256.09	14.6
Average Annual Compounded Change		0.0		2.7			10.1		13.0

Source: Smith Travel Research

Midtown West experienced a slight increase in supply in 2007, while demand rose at a stronger pace of 3.2%. As a result, occupancy reached almost 87% in 2007, the highest level during the observed period. However, capacity constraints in Midtown West currently limit major occupancy increases, as most hotels now operate at near-maximum-capacity levels. Midtown West is expected to experience a significant influx of supply over the next three to four years, which should accommodate some of the currently unaccommodated demand in this area of Manhattan. The limited supply growth enabled hotel operators to command higher room rates, causing 2007 average rate to increase by 12.6%, to a record $295.21. Average rate in Midtown West has risen by nearly $100.00 since 2004, an increase of over 47%. As a result, RevPAR recorded another double-digit increase in 2007, of 14.6%, continuing the positive trend registered in the last four years.

Midtown East

Year	Average Daily Room Count	% Change	Occupied Room Nights	% Change	Occupancy	Average Rate	% Change	RevPAR	% Change
2002	18,129	—	4,898,656	—	74.0	$217.42	—	$160.95	—
2003	18,087	(0.2)	4,947,904	1.0	74.9	208.45	(4.1)	156.23	(2.9)
2004	17,650	(2.4)	5,212,769	5.4	80.9	234.40	12.4	189.66	21.4
2005	17,648	(0.0)	5,486,294	5.2	85.2	275.87	17.7	234.96	23.9
2006	17,012	(3.6)	5,304,496	(3.3)	85.4	309.29	12.1	264.21	12.4
2007	16,855	(0.9)	5,318,421	0.3	86.4	343.53	11.1	296.97	12.4
Average Annual Compounded Change		(1.4)		1.7			9.6		13.0

Source: Smith Travel Research

Room supply in Midtown East declined over the last five years, causing some of the previously accommodated demand to seek accommodation in other areas of Manhattan. Thus, demand remained fairly stable in 2007. As a result of these market dynamics, occupancy increased by one percentage point in 2007 over the 2006 level. Average rate, however, grew by a strong 11.1% in 2007, resulting in a double-digit RevPAR increase for the fourth consecutive year.

Uptown

Year	Average Daily Room Count	% Change	Occupied Room Nights	% Change	Occupancy	Average Rate	% Change	RevPAR	% Change
2000	3,058	—	897,589	—	80.4%	$303.29	—	$243.90	—
2001	2,944	(3.7)	759,099	(15.4)	70.6%	267.30	(11.9)	188.83	(22.6)
2002	2,953	0.3	731,398	(3.6)	67.9%	256.39	(4.1)	173.98	(7.9)
2003	2,953	0.0	764,008	4.5	70.9	245.52	(4.2)	174.03	0.0
2004	2,475	(16.2)	704,902	(7.7)	78.0	286.86	16.8	223.80	28.6
2005	1,882	(24.0)	541,239	(23.2)	78.8	371.09	29.4	292.46	30.7
2006	1,818	(3.4)	520,320	(3.9)	78.4	409.74	10.4	321.34	9.9
2007	1,902	4.6	563,476	8.3	81.2	422.25	3.1	342.69	6.6
Average Annual Compounded Change		(6.6)		(6.4)			4.8		5.0

Source: Smith Travel Research

Uptown Manhattan was the area that was most significantly impacted by conversions of former luxury and upper-upscale hotels to condominiums. This trend caused supply to decrease by 1,135 rooms from 2003 to 2006. In 2007, supply expanded by 4.6% due to the reopening of the Empire hotel as well as the further establishment in the market of the Courtyard on the Upper East Side. This increase in supply was offset by a greater increase in demand within the Uptown neighborhood, resulting in an occupancy of over 80% in 2007. The strong compression in this area enabled hotel operators to push average rate from roundly $246.00 in 2003 to over $422.00 as of 2007, an increase of nearly 72%.

Downtown

Year	Average Daily Room Count	% Change	Occupied Room Nights	% Change	% Occupancy	Average Rate	% Change	RevPAR	% Change
2000	2,537	—	759,931	—	82.1	$267.38	—	$219.44	—
2001	2,618	3.2	721,211	(5.1)	75.5	240.59	(10.0)	181.60	(17.2)
2002	2,741	4.7	758,034	5.1	75.8	230.12	(4.4)	174.37	(4.0)
2003	3,275	19.5	910,871	20.2	76.2	229.75	(0.2)	175.07	0.4
2004	3,505	7.0	1,048,261	15.1	81.9	250.51	9.0	205.29	17.3
2005	3,547	1.2	1,094,774	4.4	84.6	286.35	14.3	242.14	18.0
2006	3,601	1.5	1,126,657	2.9	85.7	324.85	13.4	278.42	15.0
2007	3,625	0.6	1,152,964	2.3	87.1	364.21	12.1	317.38	14.0
Average Annual Compounded Change		5.2		6.1			4.5		5.4

Source: Smith Travel Research

Since the reopening in 2003 of several Downtown Manhattan hotels that had been partially destroyed by the September 11, 2001, terrorist attacks, this lodging market has experienced only limited growth in supply. Demand, however, grew more strongly, causing occupancy to increase to roundly 87% as of 2007. This high occupancy level indicates the presence of a noteworthy amount of unaccommodated demand in the area, which is expected to be accommodated by the large number of new hotels forecast to enter the market in the next two to three years. Continuing the positive trend observed since 2004, average rate in the Downtown market registered another healthy increase, of 12.1% in 2007, rising to $364.21 and contributing to a double-digit RevPAR increase.

<<Previous     Next >>