Five basic facts about the hotel market, especially in New York

Big-city hoteliers will be happier sooner than their small-time counterparts. It looks like demand for rooms in smaller cities is going to take longer to come back, with rate increases unlikely, it seems until next summer. The New York market has already shown a solid recovery, thanks to the corporate cards that keep road warriors away from home. For the little guys, though, the future isn’t as bright … at least, it won’t be until almost a year from now.

According to a study by Smith Travel Research, here are five interesting (and important) facts about the U.S. hotel market:

1. Flat occupancy: Small-town and highway hotels stayed basically flat for the first half of 2010, at 49 percent. Meanwhile, metro markets – like New York, Chicago and Washington, DC – pushed from 61 percent for the first half of 2009 to 65 percent for the same period in 2010.

2. Follow the money: Major hotel companies, including Marriott and Wyndham, have demonstrated that the cities have been kinder to them financially. The cash is coming from bigger city properties.
3. New York is crucial: Rates have been on the rise since March in New York, after the city experienced drops for almost a year and a half. This has been buoyed by business travel, which is where the real money is.

4. New York’s occupancy is 50 percent higher than the United States: While the overall U.S. occupancy rate reached only 56 percent for the first half of 2010, the city attained a level of 79 percent. Again, business travelers have contributed heavily to this trend.

5. Hotel rates dropped, except in New York: Excluding New York, U.S. hotel rates fell, on average, 2.7 percent (2 percent when you include New York). New York, which accounts for a mere 1.9 percent of room supply in the United States, it’s responsible for close to 6 percent of revenue.

According to USA Today:

“New York City is skewing the numbers,” David Loeb, an analyst at Robert W. Baird & Co. in Milwaukee tells Bloomberg. “Urban and suburban markets are doing the best while the others are recovering more slowly.”

[photo by Francisco Diez via Flickr]