International Tourism Shortfall Clouds NYC Hotel Industry’s Comeback

New York City hotel guests paid an average of $333.71 a night in 2025, the highest nominal rate on record, while the city led the nation in occupancy and revenue per available room. Those figures suggest a market operating at full strength, but inflation and hotel category data tell a more complicated story. The average daily rate remained below its 2019 level after adjusting for inflation, and occupancy reached 84.1 percent, down from the city’s 87.5 percent rate in 2019.

Hotels sold 38.1 million room nights, also short of the 38.8 million sold in 2019, with performance varying across the market. Luxury hotel occupancy rose to 82.2 percent, upscale occupancy held at 87.5 percent, and midscale occupancy declined 7 percent from 2024 to 76.7 percent.

The comparison with pre-pandemic benchmarks shows that the comeback remains unfinished. That tension sits at the center of a report from New York State Comptroller Thomas P. DiNapoli, which explains why the market remains exposed despite its national lead.

Fewer International Visitors Leave NYC Hotels Exposed

New York City welcomed 65 million total visitors in 2025, including 52.4 million domestic travelers and 12.5 million international travelers. Domestic visitation reached 98.7 percent of its 2019 level, while international visitation reached 92.6 percent, down from 2024. The city drew about 19 percent of all international visitors to the United States in 2025, according to the comptroller’s July 16 findings.

International visitors spend an average of $627 per night in New York City, according to the report. Still, international visitor spending in the city fell by 1.3 percent from 2024 levels, even as overall direct visitor spending reached $55.6 billion. Hotel accommodations accounted for roughly one-quarter of total visitor spending.

DiNapoli attributed the slower international recovery to federal trade and immigration policies, domestic issues, and global geopolitical instability.

“The city’s hotel industry has largely recovered from the pandemic,” DiNapoli said in the state’s announcement. He added that a complete recovery would require international visitors to return more quickly and hotel employment to increase with demand. Vijay Dandapani, president and CEO of the Hotel Association of New York City, said hotels continue to operate on thin margins despite paying high wages and contributing more tax revenue.

Strong Room Demand Has Not Restored Hotel Employment

New York City hotels contributed $2.4 billion in city tax revenue during fiscal 2025, while their financial performance continued to exceed the national trend. Revenue per available room increased locally even as the national figure declined for the first time since 2020. Those gains, however, have yet to produce a full recovery in hotel employment.

The city had nearly 13 percent fewer hotel workers in 2025 than it did in 2019, with Manhattan accounting for most of the shortfall. The gap affects an industry whose workforce remains closely tied to New York City, as most hotel employees live within the five boroughs and nearly two-thirds are foreign-born.

Even as employment lags, the city’s hotel capacity continues to grow. New York City was expected to add 4,852 rooms in 2026, leading the country in new hotel construction for a second consecutive year. Development will continue through 2028, although the current pipeline remains considerably smaller than it was in 2020.

That expansion coincides with a projected increase in tourism. New York City Tourism + Conventions forecasts 66.3 million visitors in 2026, with international arrivals returning to their 2024 level and domestic visitation setting a record. While the comptroller expects the hotel industry to continue growing through 2028, further restrictions on international travel could reduce visitor spending and prolong the recovery.

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