National Guard Deployment Boosts Hotel Occupancy in Upstate New York Amid Correctional Crisis

In early 2025, a significant strike involving thousands of correctional officers across Upstate New York led to an unexpected economic shift in the region’s hotel industry. Cole Masler of HVS explores the implications of the strike and the subsequent deployment of the New York National Guard on local hotel market performance, particularly in the Middletown area of Orange County.

Background of the Strike

On February 17, 2025, over 25 prisons in Upstate New York experienced a massive walkout by corrections officers. The strike, prompted by grievances over staffing shortages, poor working conditions, and the implementation of the HALT Act—which restricts the use of solitary confinement—lasted 22 days. New York State Governor Kathy Hochul declared the strike illegal under the Taylor Law, which prohibits public employees from going on strike. The conflict concluded in early March when the state and the New York State Correctional Officers & Police Benevolent Association (NYSCOPBA) reached a resolution. However, the aftermath resulted in the firing of over 2,000 officers and sergeants, reducing the state’s correctional staff from approximately 13,500 to 11,000.

National Guard Deployment and Hotel Market Impact

To maintain order and security in the prisons, Governor Hochul deployed thousands of National Guard troops. This influx of personnel significantly benefited the hotel industry in Orange County, particularly in Middletown. An analysis of 14 local hotels revealed a marked increase in demand, primarily attributed to the accommodation needs of the National Guard. By the end of 2024, hotel occupancy in the area had nearly returned to pre-pandemic levels, with a slight increase in the average daily rate (ADR).

Continuing into 2025, the Middletown submarket saw occupancy rates climb to approximately 76.0% by August, an improvement from 68.7% during the same period in 2024. Despite a slight decrease in ADR due to the prevalence of government per-diem rates, the overall revenue per available room (RevPAR) experienced a gain, bolstered by the ongoing presence of National Guard troops.

Future Outlook

The duration of the National Guard’s deployment remains uncertain, with estimates suggesting a presence of two to three years as the state addresses its staffing challenges. This prolonged deployment is expected to continue driving hotel demand in the area, providing a temporary but significant boost to the local economy. Additionally, the Middletown hotel market benefits from diverse demand sources, including strong local employers and a growing tourism sector, further enhancing its appeal as an investment opportunity.

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