Hotel Market Update: New York City

By Matt Sweeney – Originator

Recapping 2025

Despite U.S. hotel fundamentals softening last year, New York City continued to separate itself as the strongest lodging market in the country.

According to CoStar, NYC posted the highest operating metrics among the Top 25 MSAs in 2025. The Five Boroughs posted 84.1% occupancy, an ADR of $333.71, and RevPAR of $280.71, marking the third consecutive year the market led the nation in occupancy.

Even more notable is the market’s continued pricing power. While occupancy declined only 0.2%, ADR increased 4.7% and RevPAR rose 4.5% year-over-year, demonstrating operators’ ability to push rates in an already high-barrier market.

Against a backdrop of flat-to-negative occupancy (-1.2% YoY) and RevPAR (-0.30% YoY) growth nationally, New York City’s combination of industry-leading occupancy and continued rate growth reinforces its position as the deepest and most resilient hotel market in the United States.

Emerging Trends in 2026

Supply Growth:

According to CoStar pipeline data, New York City is expected to deliver 4,852 newly built hotel rooms in 2026, the most of any U.S. market for the second year in a row. Notably, lodging supply and demand are still below 2019 levels, suggesting the market remains in a rebuilding phase.

Union Negotiations:

In July, the contract between the Hotel and Gaming Trades Council (HTC) and the Hotel Association of New York City is set to expire. HTC President Rich Maroko has indicated the union will push for higher wages and increased contributions toward members’ healthcare and pension benefits as negotiations approach. In short, higher labor costs are likely on the horizon for New York City hoteliers.

A Capital Markets Commentary

Given New York City’s durable operating performance and diverse demand drivers, capital remains readily available for realistic hospitality loan requests in 2026.

For stabilized hotels, insurance companies, depository institutions, and CMBS lenders all represent credible execution paths. Insurance companies continue to be a strong option for moderately leveraged requests, often offering an attractive combination of competitive pricing, minimal covenants, and non-recourse structures. CMBS remains the primary outlet for borrowers seeking maximum leverage and full-term interest-only. Meanwhile, banks have begun leaning back into the space, and are increasingly willing to provide structural flexibility in exchange for some degree of recourse.

Overall, the lending environment for well-performing New York City hotels remains constructive, with multiple capital sources competing for quality assets.