Hotel Association of NYC Responds to Reports of CBRE's Projections for NYC Hotels

NEW YORK, NY (06/21/2022) (readMedia)-- HANYC (the Hotel Association of NYC) today responded to reports of CBRE's sunny projections for the future of NYC hotels, which fails to account for the damage the industry continues to suffer from COVID-19. A recent report from the American Hotel & Lodging Association shows a $21 billion business travel shortfall for hotels across the U.S., hitting New York the hardest with a $2.5 billion loss. More than 115 New York City hotels permanently closed during COVID-19, and the already struggling hotel industry faces a property tax burden that is double that of other major U.S. markets.

"Unfortunately for hotels and their workers, it is extremely misleading to suggest that the industry will bounce all the way back anytime soon. More than 20,000 city hotel rooms were permanently lost or are still unavailable since the COVID crisis began, and tens-of-thousands of workers are still out of work because hotels cannot afford to reopen. The only way for the hotel industry in New York to fully recover is if its tax burden is reduced so that debt can be reduced," said Vijay Dandapani, President and CEO of the Hotel Association of New York City.

Before the pandemic, the hotel industry employed more than 50,000 people who are mostly immigrants and people of color, raised $3.2 billion a year in City tax revenue, and added $22 billion annually to our economy.

On behalf of the hundreds of hotels that are struggling to get by, the Hotel Association of New York City is asking for lawmakers to deliver relief with the following measures:

• Permanently allow properties that challenged their prior assessed values and got them lowered to use that lower rate as the base for this tax year and keep that rate for the following year to further facilitate rebound;
• Waive the 18 percent interest rate on property taxes paid late by hotels for the next three years; Lower the occupancy tax rate, which is currently 5.875 percent, to 2.875 percent;
• Increase the Cap Rate in order to lower property tax overall.

A recent report from HANYC shows that a temporary reduction in the Hotel Occupancy Tax from 5.875 percent to 2.875 percent for two years would allow for hotels to raise their average daily room rates without driving away consumer demand, as well as projected that it would increase hotel occupancy overall:

• The projected increase in average daily room rates would allow for hotels to generate an additional $240 million to $480 million in revenues.
• And a one percent increase to the occupancy rate would also increase revenues by a projected $213 million.

About HANYC

The Hotel Association of New York City (HANYC) is the oldest hotel association in the United States and one of the oldest trade associations in the nation. The Association is an internationally recognized leader in New York City's $5 billion tourism industry and represents nearly 300 hotels, which, together, employ approximately 50,000 employees. The Association advocates on behalf of its members in a variety of legislative areas and sets standards for training, best practices and cooperative initiatives with key New York City stakeholders.