Increases in occupancy, ADR and RevPAR accelerated across Manhattan during the second quarter, as the vaccine rollout gained traction in Q1 and early Q2, and the city began to relax restrictions put in place at the height of the pandemic, according to the PwC Manhattan Lodging Index: Q2 2021. Off an easy comp (Q2 2020), second-quarter RevPAR experienced a year-over-year (YOY) increase of 103.4%, heavily weighted to performance during the month of June.
“While RevPAR continued to rebound in Q2, Manhattan hotels have a long way to go before recovering to pre-pandemic levels,” said Warren Marr, U.S. hospitality & leisure managing director, PwC. “For 1H 2021, RevPAR was still down 65.2% from the same period in 2019, compared to down 71.2% for all of 2020. The Delta variant has contributed to a slowing in office reopenings across the city, leaving performance for the second half of this year in question.”
RevPAR increased 103.4% YOY during the second quarter of 2021, with both occupancy and ADR surging as mask mandates and travel restrictions previously put in place during the COVID-19 pandemic were (temporarily) lifted. YOY increases in occupancy were highest in June—up 54.6%. With overall occupancy for the quarter at 52% and ADR at $183.95, Manhattan RevPAR doubled from $47.02 in Q2 2020 to $95.65 in Q2 2021.
Of the four market classes tracked, luxury properties exhibited the most notable YOY increase in RevPAR to $209.42—up 584.9% for the quarter, driven by a 230.8% increase in occupancy from 12.9% in 2020 to 42.7%, and a 107.1% increase in ADR from $236.72 to $490.20. For upper-upscale hotel properties, where occupancy grew by 26.9% and ADR experienced an increase of 32.4%, Q2 RevPAR finished the quarter up 68.0% to $79.68.
Upscale and upper-midscale properties posted relatively lower, but still significant increases in RevPAR of 55.8% and 55.4%, respectively. With lower increases in ADR of 14.8% and 1.5%, respectively, RevPAR finished the quarter at $76.54 and $79.95, respectively. Of note, upper-midscale properties beat out upper-upscale in RevPAR for the quarter.
Of the five Manhattan neighborhoods, all experienced YOY increases in RevPAR with occupancy and ADR growing across the island. Upper Manhattan had the largest increase in RevPAR, up 242.1%, driven in large part by a 194.3% increase in ADR YOY. Lower Manhattan RevPAR grew 199.2%, driven by a 90.9% increase in occupancy. Midtown South and Midtown West posted increases of 80.2% and 80.0%, respectively. Midtown East had the smallest increase in RevPAR, up 76.8%.
During the second quarter, RevPAR at full-service hotels proved to experience more significant occupancy and room rate growth compared to limited-service hotels. With YOY increases in occupancy of 48% and 40.1%, respectively, and increases in ADR of 49.8% and 22%, respectively, RevPAR increased 121.6% for full-service properties, while limited-service hotels saw an increase of 70.9% over the same period.
For chain-affiliated and independent hotels, second-quarter RevPAR grew by 84.3% and 128.3%, respectively, driven primarily by increases in ADR of 38.1% and 54.0%.
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