New York Hilton Midtown Faces Decline in Overseas Guests

News Summary

New York City’s Hilton Midtown hotel reports a decline in overseas guests, leading to potential unprofitability this year. Occupancy rates fell to 71%, with revenue per available room slightly down. CEO Thomas Baltimore expresses uncertainty about the market’s future, citing fewer Canadian visitors and ongoing economic challenges. Despite a 17% increase in revenue per available room in April, the overall trend remains concerning. The hotel, comprising 1,878 rooms, is a key player in a city facing a 12% drop in hospitality jobs since 2019.

New York City is facing potential challenges as the New York Hilton Midtown, one of the city’s largest hotels, contends with a significant decline in overseas guests. Owner Park Hotels & Resorts reported that the hotel could turn unprofitable this year amidst falling occupancy rates and reduced revenue per available room.

In the first quarter of this year, occupancy at the Hilton Midtown fell to 71%, down from 75% in the same period last year. Revenue per available room also decreased slightly by 0.3%, coming in at $190. This downward trend aligns with a broader concern about fewer international travelers choosing New York City as a destination.

Thomas Baltimore, CEO of Park Hotels & Resorts, has expressed “tremendous uncertainty” regarding the market’s future. The hotel reported a decline in Canadian guests, which has contributed to the overall drop in overseas travel. Despite the trends, the month of April saw revenue per available room increase by 17% compared to the previous year, partly boosted by the late occurrence of the Easter holiday.

In terms of overall market context, the Hilton Midtown comprises 1,878 rooms and sits at the intersection of Sixth Avenue and West 53rd Street. It is Manhattan’s largest hotel, second only to the 1,971-room Marriott Marquis Times Square. The city boasts a total of 135,000 hotel rooms, which is second only to Las Vegas, and has increased its inventory by 60,000 in the last two decades. Average nightly rates in New York City exceed $300, with an impressive average occupancy rate of 85%, significantly above the national average of 63%.

However, challenges are mounting for Park Hotels, which owns a total of 37 convention-center and resort hotels across the country, providing approximately 22,000 rooms. The company projected a financial outcome for this year that ranges from an $8 million net loss to a $52 million net earnings, a stark revision from earlier projections of $87 million to $147 million in net income.

The decline in profitability is being exacerbated by a slowdown in Hawaii, where Park Hotels manages 3,500 rooms. Data indicates a 6% reduction in Japanese visitors traveling to Hawaii and a 1% drop in Canadian visitors, both of which factor into overall occupancy and revenue. Management has found that booking windows have “narrowed significantly” amid ongoing trade-war tensions, which has added another layer of uncertainty to future projections.

Looking ahead, operating profit margins are expected to lower to between 9.5% and 11.5%, a decrease from previous estimates of 13.0% to 14.9%. As the economic landscape shifts and international travel fluctuates, Park Hotels has seen a decline in its stock price, which fell by 10 cents to around $10.20 per share, marking a decline of 26% this year.

As the hospitality industry continues to navigate these challenges, nearly 47,000 New Yorkers are employed in accommodation services – a figure that is currently 12% below levels reported in 2019. The situation at the New York Hilton Midtown serves as a broader indicator of the ongoing adjustments faced by the hotel sector as it adapts to changes in traveler demographics and economic conditions.

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Additional Resources

• Crain’s New York: Occupancy Falls at New York Hilton Midtown
• Wikipedia: New York City
• Travel Weekly: Hilton Revises Revenue Forecast
• Google Search: New York hotel occupancy
• New York Post: Crack Down on Lawless E-Bikers
• Google Scholar: New York hospitality industry
• Travel Market Report: Hotel and Resorts News
• Encyclopedia Britannica: New York hotel industry
• Hilton Stories: New York Hilton Midtown Reopens Its Doors
• Google News: New York Hilton