New York City hotel prices are soaring to unprecedented levels ahead of the holiday season, with luxury accommodations reaching extraordinary heights and even traditionally affordable rooms becoming too costly for many visitors, The Post has learned.
The sharpest increases are appearing at the city’s most upscale properties. At the recently renovated Four Seasons on East 57th Street, a 500-square-foot junior suite for Thanksgiving was listed at $2,912 per night, including taxes and fees, according to the hotel’s website.
Yet the most jarring price tags may be found at more modest hotels. Last week, the Holiday Inn Express in Chelsea listed a standard room for same-day booking at $435 per night. The same room was priced at $545 for Thanksgiving, with the checkout page declaring, “Well done! You’re getting a great price.”
“We were surprised by just how expensive the nearby hotel options were,” said Lisa Hawkins, a spokesperson for the Washington, DC-based Distilled Spirits Council of the US, which needed Manhattan rooms for an event in SoHo last week.
“Even the more value-oriented hotels were around $550 a night, while some options exceeded $1,000,” Hawkins said. Because the organization needed several rooms, it ultimately chose a “budget-friendly” hotel close to the event, she added.
New York’s hotel industry has staged a dramatic recovery since sinking to historic lows during the pandemic. In September, the city’s average nightly rate reached a record $468.54, edging out the previous monthly high, set last December, by 96 cents, according to hotel market research firm CoStar Group.
Hotel operators maintain that record prices have not translated into easy profits. They point to persistent inflation, regulatory requirements, soaring utility bills, real estate taxes and the nation’s highest labor costs as expenses that continue to squeeze their businesses.
“The hotel industry continues to face headwinds — not least because tourism is still below 2019 numbers,” said Vijay Dandapani, chief executive of the Hotel Association of New York City.
The industry group forecasts that hotel rates will rise another 3% to 4% next year, broadly in line with inflation. Citywide, however, the average rate in September was already 7% higher than it was a year earlier.
At the current pace, “We could break another record in October,” said Didio Pequeno, CoStar Group’s director of hospitality analytics. “There doesn’t seem to be a rate ceiling in New York City today.”
Industry experts say the city’s 2023 crackdown on short-term rentals offered through Airbnb and similar platforms, known as Local Law 18, has given hotels an additional lift as tourism continued its rebound in 2024.
NYC Tourism + Conventions, the city’s tourism bureau, projects that more than 65 million people will visit New York in 2026. That would approach the more than 66 million visitors recorded in 2019.
Hotel executives say much of the latest demand is coming from affluent domestic travelers. In September, the average nightly rate for luxury hotels across the city climbed to $841 — a striking 70% increase from the $494 average recorded in September 2019.
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“If you are in the luxury market, things are fantastic,” Dandapani said. “We are hearing that it’s a relatively new demographic” occupying the city’s priciest rooms.
“It’s generally wealthy Americans from other parts of the country who are 50 years old or younger, in their 30s, people who didn’t stay in the top hotels” in the past, he said.
At the Mandarin Oriental, a standard king room overlooking the Hudson River was priced at $2,867 per night for Thanksgiving. The Baccarat Hotel in Midtown listed a “classic king” room at $2,238 per night.
Prices at lower-end hotels have risen less dramatically in percentage terms. The average nightly rate for budget properties reached $203 in September, up 23% from $164 in September 2019. Even so, hotel leaders worry that escalating costs, particularly in Manhattan, are pushing an entire category of travelers out of the market.
As of Oct. 29, the Hilton Garden Inn on East 52nd Street had one Thanksgiving room available for $523. Other rooms were priced at $750 or more, including a $1,239 option with two double beds.
“We are attracting fewer budget-conscious travelers,” Dandapani said. “They don’t have the disposable income and we don’t have budget accommodations.”
The shortage of affordable rooms has been compounded by the conversion of numerous lower-cost hotels into migrant shelters in recent years. Meanwhile, CoStar projects that 79% of new hotel development in the city will consist of luxury properties.
Developers are gravitating toward the high-end market partly because a 2021 law made hotel construction more expensive and time-consuming. The measure introduced stricter labor requirements and an approval process that can take as long as two years.
Even so, New York City is expected to lead the nation in new hotel construction for a second straight year. An October report from New York Comptroller Thomas DiNapoli found that 24 projects are in the pipeline, representing 5,778 additional rooms through 2028.
“The New York City hotel industry ranked highest in the nation for hotel occupancy, room rates, and revenue per available room,” the report said.
Although 2026 brought several major attractions, including the FIFA World Cup and the 250th anniversary of the United States, hotel operators believe the city’s strong travel demand will carry into the following year.
“This was a very good year,” said Richard Born, owner of BD Hotels, which runs 24 New York properties, including The Bowery, the Maritime, The Jane and Mercer hotels.
“I don’t see anything that will make 2027 bad.”
