Hotel Market Update: NYC Hospitality, July 2026
By Matt Sweeney – Originator
Mid-Year Check-In
Nationally, it’s already been a good year for hospitality. At June’s NYU International Hospitality Investment Forum, CoStar and Tourism Economics upgraded their 2026 forecast, now projecting 2.8% RevPAR growth for the full year, a sharp turnaround from 2025’s 0.3% decline. The two firms expect nationwide occupancy to reach 62.8%, up from 62.3% in 2025, alongside a 2.0% year-over-year increase in ADR.
New York City, as it did throughout 2025, continued to outpace the field. During the week ending June 13 (which spanned the Knicks’ NBA Finals run and a FIFA World Cup match at MetLife Stadium), NYC posted the largest ADR and RevPAR gains of any Top 25 market versus the same week last year: ADR rose 17.1% to $399.15, while RevPAR climbed 18.9% to $358.00, despite occupancy increasing just 1.5%.
Within Manhattan specifically, the same rate-driven pattern holds. PwC’s Hospitality Directions report, published in May 2026, found Manhattan RevPAR up roughly 5% year-over-year in Q1, a continuation of the pattern seen throughout 2025: Manhattan ADR climbed 6.5%, while occupancy held flat to slightly down.
The pattern isn’t uniform across Manhattan’s segments, though. Pricing power is most pronounced at the luxury end of the borough’s market, where occupancy has softened slightly as rates rise. Manhattan’s select-service and upper-midscale hotels are the exception: ADRs there rose 5.5% year-over-year in Q1 2026, and, unlike the luxury segment, occupancy in this tier actually improved versus the same period last year.
Overall, the conclusion remains the same: New York City retains pricing power that few other cities can match, while maintaining mid-80s occupancy even as new rooms continue to come online.
The Labor Question: Resolved
It’s good that New York City has durable pricing power, because labor just got more expensive. The Hotel Association of New York and the Hotel and Gaming Trades Council struck a new eight-year agreement in May that went into effect July 1, averting a strike that would have been a disaster during the World Cup. Over the contract’s term, wages will rise by more than 50% on average, with housekeepers on track to earn over $100,000 annually by year six, alongside continued full employer-paid healthcare coverage.
Given the pricing power NYC hotels have shown, particularly at the luxury end, rising labor costs should be more absorbable than they would have been in a market without the same robust ADR growth.
A Capital Markets Commentary
With the labor overhang resolved and operating performance still among the strongest in the country, capital availability for well-positioned NYC hotels has remained sound. Insurance companies remain the go-to for hoteliers with a low teens or better debt yield and desire for non-recourse execution; CMBS continues to have its niche for deals at higher leverage points, looking for non-recourse and full-term interest-only; and banks are leaning in for trusted operators, now underwriting against a known labor cost trajectory rather than an open question. For sponsors with stabilized NYC assets, the lending environment heading into the back half of 2026 looks constructive, and having the right mortgage banker on your side can help you access the entire market and secure the most competitive capital.
