Hotels in New York are getting cheaper and cheaper by the day.
This increase in the number of hotels that are reducing their prices can be attributed to the fact that there has been a downturn in tourism due to the weak global economy amidst the dollar strengthening. The other reason for the prices dropping might be due to the fact that there are just too many hotels in New York at the moment and thus exceeding the demand.
Despite the negative outlook at the moment due to a downturn in tourism, New York still remains the favorite city for many investors as well as developers. It is estimated that New York has more than 100,000 hotel rooms and over 27,000 hotels are currently under construction or being planned.
“If you’re trying to get a room during peak times, it’s still going to be very expensive, but there will be softer times when you can get bargains, which wasn’t the case during the last peak,” David Loeb, a lodging analyst at a Milwaukee-based Robert W. Baird & Co said.
New York has seen an increase in the number of hotels that are being introduced over the past few years and according to Loeb the city should expect more hotels to be opened something that he says will eventually lead to prices of hotels going down especially in areas like Brooklyn where hotels have opted to offer cheap rooms as a result of the overabundance of supply.
“When you have this many more hotels, especially in submarkets like Times Square, there is a psychological effect on the people who are setting rates,” Loeb said. “They feel less confident to raise prices and risk sending you down the street to the new competition.”