Everyone sleeps here
But Times Sq. has low-ish hotel rate$
THERE are a load of people sleeping in Times Square these days — and I’m not just talking about the ones lying on the sidewalk begging for money.
Hotels around Times Square are experiencing occupancy growth rates that are three times the national average. And there have been 3 percent more rooms sold in 2015 than a year ago, with a combined occupancy rate of nearly 88 percent.
That’s a boom. So industry experts are wondering: Why are room rates falling so much?
More than other industries, hotels are captives of supply and demand economics. So with rooms filling up so easily, one would think that rates would be rising nicely. But they aren’t.
“Why? That’s the $100 million question,” says Jan Fre
itag, senior vice president of STR, which keeps detailed statistics on the hotel industry nationwide.
Occupancy of “almost nine out of 10 rooms every night for 11 months,” Freitag says, “is an amazing feat” especially since the US average over that period was just 66.7 percent.
Analysts and hotel owners say overbuilding is the main problem. But give Airbnb some of the blame, too. The roomsharing service is estimated to be taking 10 percent to 12 percent of the hotel revenues citywide.
“The ongoing battle is, how many rooms is Airbnb taking from hotels,” says Mark Van
Stekelenburg, PKF Consulting USA/CBRE Hotels, which also tracks the industry.
VanStekelenburg says Times Square hotels, as well as those throughout the city, should be experiencing doubledigit growth in room rates with occupancy rates as robust as they are.
But instead, according to STR data, room rates are down 1.3 percent from last Christmas. Right now, the average Times Square room rate is “just” $280.84 a night.
But that doesn’t begin to tell the story of the deals being offered. One hotel owner said a “heads in the bed” mentality has definitely taken over. In other words, get someone into a room no matter how little that person pays.
Not surprising, this owner said that “the hotels with the largest number of rooms are doing the most discounting.”
He added that “if nobody panics, everybody wins.” But some are panicking.
Take as an example some of the rates I was able to find recently on TripAdvisor.com, a site that offers discount hotel rooms. Hilton Times Square, $199 a night; Wyndham New Yorker, $134; Pod 51 Hotel, $75; Staybridge Suites Times Square, $119; Hilton Garden Inn Times Square, $116, and the gigantic Row NYC Hotel on Eighth Avenue (formerly The Milford Plaza), $116.
The most stunningly discounted price seems to be the Waldorf Astoria, which was offering rooms at only $175 a night. Compare that with its uptown rival, The Plaza, which wanted $995 for a night’s lodging.
But Airbnb, not surpris ingly, isn’t the only challenge.
By one count, there are four new hotels being built right now in the Times Square area, where the number of rooms has already increased by 3.6 percent (Airbnb not included) over the last year.
One of those new hotels is going up on the same block as The Post’s offices. When the building on the new hotel’s site was razed, a centuryold sign for the Hotel Longacre became visible.
The Longacre was offering rooms for $1 a night. With Bath, $1.50. Lunch was 40 cents. Dinner 65 cents.
Nobody expects current rates to get that low. But don’t be surprised if hotels start giving away free nights once the holiday season is over.
Maybe you are wondering why the stock market reacted so well at first to the Fed’s Wednesday rate hike — and so poorly last Thursday and Friday.
Well, last week was one of those big options and future-expiration weeks when professional traders try their damnedest to keep stock prices up. And it’s also report card time for money managers, who have to explain to their clients why they’ve had such disappointing results in 2015.
Add to that the fact that the Fed doesn’t want a stock market rebellion right after its rate hike and you have a trifecta of reasons there was a stock rally right after the rate hike was announced.
Why did prices go down Thursday and Friday? Because stocks should have declined in the first place now that the Fed is being less friendly.
Reality always wins out. And reality is a bitch.