Fewer visitors check into New York

New York: New York City hotel occupancy fell to 63 per cent last month, a 13 percentage point drop from January 2008, and the average cost of a room declined 15 per cent to $229 (Dh840.4) a night, city tourism officials said.

The reductions show how the recession has spread from Wall Street, which provided about 12 per cent of city revenue, and real estate, which employs more than 250,000, including construction.

The city broke records last year with 47 million visitors, who spent $30 billion in hotels, restaurants, theatres and stores, and injected almost $2 billion in tax revenue last year, said NYC & Co., the city's tourism office.

"I'm more concerned about the room rate than the occupancy, because hotels invest tens of millions of dollars maintaining their properties to ensure that they are world class," said NYC & Co. President George Fertitta. "When there's erosion to their rate, it affects their ability to do that."

Last year's record-breaking numbers meant the city's leisure and hospitality business had bounced back from the 2001 attack on the World Trade Centre. While the industry lost 4,400 jobs statewide last year, it employed 307,200 in the city by the end of 2008, representing a 0.4 per cent increase for the year, according to the state Labour Department.

"There's been some reduced hours in our restaurants and a minimal amount of layoffs, less than 100, at the Marriott Marquis," said Kathleen Duffy, a spokeswoman for Marriot's 12 hotels in the city.

The Marriott Marquis, a 1,949-room property in Times Square, employs about 2,000 when fully occupied, she said. Hotels have also experienced dinner and meeting cancellations, including a conference for the National Child Support Enforcement Foundation, which filed for Chapter 11 bankruptcy protection last month, Duffy said.

"Most of the lower costs involve changes in the menu to less expensive offerings," Duffy said. "What we see is some events attracting fewer people than expected."

"I'm not surprised to see lower numbers in this economy," said Dan King, area managing director for the Sheraton New York. "We are seeing less people showing up, groups aren't filling their blocks, and there's a little bit of a drop in attendance pretty much across the board."

Hotels throughout 2008 enjoyed an average hotel occupancy rate of 85.4 per cent and an average room price of $313 a night, NYC & Co. has reported.

After recording occupancy increases at least 20 percentage points higher than the national average throughout 2008, and adding 1,800 hotel rooms to the city's inventory to bring the total to 75,600, tourism is likely to decline by about 10 per cent, or 4.7 million visitors, this year, NYC & Co. President George Fertitta said last month.

Even with the recession, the tourism industry is outperforming peers in the rest of the country, said Fertitta, an appointee of Mayor Michael Bloomberg.

"We have pockets of success here and there. The New York Bankers Association is coming here rather than going to some fancy island, and we hope that is part of a mini-trend."