NYC hotels sell at bargain prices as market slowly recovers
Per-room revenues nearly returned to 2019 levels last year, but occupancy has long way to go
By: Bill Egbert
Sheraton Times Square (Google Maps, Getty)
New York City’s hotels enjoyed a much-needed comeback last year — those that survived the devastating effects of the pandemic, at least. Although the city still has fewer hotel rooms than it did before Covid, those rooms generated about as much revenue last year as they did in 2019. The hospitality sector’s all-important metric of revenue per available room (or RevPAR) reached $215.16 in 2022, up 48 percent from 2021 to fall just short of the $218.75 figure recorded in 2019.
Occupancy, however, was at 74.8 percent last year — significantly higher than 2021, but still down more than 13 percent from 2019. That helped contribute to some serious bargains in the investment sales market.
The biggest hotel sale of 2022 dwarfed its nearest rivals, but was still a relative steal.
Host Hotels & Resorts unloaded the Sheraton New York Times Square to MCR Investors for $323 million — a humbling haircut for Host, which purchased the 51-story hotel for more than twice that, $738 million, in 2006.
None of the other hotel sales in Manhattan cracked nine figures. The runner-up was Sonesta International Hotels Corporation’s purchase of The Fifty Hotel at 155 East 50th Street for $99.8 million. But was part of a larger, $324.3 million deal for four hotels — each of which ranked among the year’s top 10 hotel sales.