Manhattan hotels extended their upswing in the first half of 2025 with RevPAR rising 7.1 percent compared to the same period in 2024. Growth remains largely rate-driven with ADR increasing 5.7 percent, supported by a 1.4 percent increase in occupancy. The market has shifted beyond post-pandemic stabilization and towards long-term growth. However, the durability of this growth is largely dependent on broader economic conditions and geopolitical issues.
“Despite macro headwinds, including decelerating travel into the metropolitan New York area and inflation pressures, Manhattan hotels delivered a strong performance with a 7% RevPAR growth. Continued strong resilience in pricing power is expected to relieve margin pressures.” Abhishek Jain,Principal, PwC
RevPAR increased 7.2 percent year-over-year during the second quarter of 2025, consistent with first quarter growth of 7.3 percent. Growth remains largely rate-driven with ADR increasing 5.4 percent in the first quarter and 6.1 percent in the second quarter. For the first half of 2025, occupancy averaged 82.3 percent and ADR reached $310.51, resulting in a RevPAR of $255.51.
Luxury properties remain the top performer in the Manhattan market, with RevPAR increasing 10.1 percent in the first half of 2025—nearly double the growth of upper midscale through upper upscale properties. This bifurcation in performance is a trend that has emerged throughout the U.S., as these properties remain more insulated from inflationary pressures.
Of Manhattan’s five primary neighborhoods, Midtown East posted the largest RevPAR increase over the first half of 2025 at 10.6 percent. This represents a sharp reversal from the first half of 2024, when Midtown East recorded the weakest year-over-year RevPAR growth among the neighborhoods. By contrast, Lower Manhattan recorded the lowest RevPAR gain in the first half of 2025 at 6.2 percent, driven by flat occupancy growth of just 0.1 percent.
Full-service hotels outpaced limited-service properties in the first half of 2025, with RevPAR growth of 7.4 percent versus 5.0 percent. The two groups averaged nearly identical occupancy levels with full service at 82.3 percent and limited service at 82.2 percent.
Chain-affiliated hotels continue to outperform independent hotels, with first-half RevPAR increasing 8.1 percent versus 4.8 percent. As expected, growth among chain-affiliated properties was primarily rate-driven, with a 6.5 percent ADR increase complemented by a 1.5 percent occupancy gain.
Manhattan hotel performance remained strong in the first half of 2025, underscored by rate-led growth that particularly benefited luxury and chain-affiliated properties. As the market transitions from stabilization into expansion, the key question is how long this momentum can be sustained—an outlook that will depend heavily on broader economic and geopolitical developments. Looking to the near term, international tourism headwinds pose challenges, but rising business travel demand offers a potential counterbalance.
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