Dive Brief:
- New York City’s Manhattan lodging market saw strong RevPAR results in the first half of 2025 driven by ADR gains, with luxury hotels being the top performers, according to a recent PwC index.
- In H1, Manhattan RevPAR increased 7.1% year over year to $255.51, per the report. This growth was supported by a 5.7% year-over-year increase in ADR, to $310.51, and a 1.4% year-over-year increase in occupancy, which averaged 82.3% in the half.
- The market has “shifted beyond post-pandemic stabilization and towards long-term growth,” according to PwC. However, future performance will be dependent on the impacts of near-term headwinds.
Dive Insight:
In H1, Manhattan hotels largely benefited from strong performance at luxury and chain-affiliated hotels, according to PwC. Luxury properties in the market saw RevPAR increase 10.1% year over year in the half, which was nearly double the growth of upper midscale through upper upscale properties, the index detailed.
Luxury outperformed other hotel segments in Manhattan amid an industrywide bifurcation. Wealthy travelers who are insulated from inflationary pressures are thriving while their lower-income counterparts are tightening purse strings, said hospitality professionals at this year’s Lodging Conference.
Meanwhile, branded hotels outperformed independent hotels in Manhattan in H1. RevPAR increased 8.1% year on year for chain hotels versus 4.8% for independent properties, according to the index. In recent weeks, Marriott International, Hilton and Wyndham Hotels & Resorts have launched new brands aimed at bringing independent owners under their systems.
In the near term, hotel performance growth in Manhattan will be challenged by broader economic and geopolitical developments, including international tourism headwinds, according to PwC. In May, the World Travel & Tourism Council reported that the U.S. was on track to lose $12.5 billion in international visitor spending in 2025. Markets across the U.S. felt a pinch from weakened inbound travel in the second quarter, hotel CEOs noted during Q2 earnings.
Despite macroeconomic pressures, “continued strong resilience in pricing power is expected to relieve margin pressures” in Manhattan, PwC Principal Abhishek Jain said in a statement.
Earlier this week, Ennismore announced it will bring a luxury Delano hotel to Manhattan, though an opening date was not disclosed.
