Hotel rooms in New York cost an average of over $300 per night because many hotels cater exclusively to migrants, reducing supply during a tourism boom.

• In 2023, according to the New York Times, a hotel room in NYC will cost an average of $301 per night – a record.

• Airbnb and inflation were to blame. But the refugee crisis also played a major role.

• Dozens of hotels have been converted into accommodation for migrants, reducing the supply of available rooms.

Travelers planning a trip to New York City should expect to spend more money on a hotel than ever before.

In 2023, the average cost of a New York City hotel room was $301 per night, up from about $278 per night in 2022, according to commercial and residential real estate provider CoStar. And from January to March 2024, the average nightly hotel rate in the city was about $231, up from $216 per night during the same period last year.

But it’s not just the increase in travel to New York City that’s driving up prices. The upheaval in the Airbnb rental market, inflation and the decline in new hotel construction are also reasons for the price increase.

And as the New York Times recently reported, the refugee crisis has also led to a rise in hotel prices. Many hotels began to accommodate migrants during the pandemic, some of them exclusively.

This has reduced the supply of available rooms and driven up prices for guests searching for accommodations across the city. According to the Times, about 135 of New York City’s nearly 700 hotels currently house asylum seekers. These hotels earn up to $185 per night per room, according to the city.

The Times reported that so far no hotel that had converted to accommodating migrants had returned to being a conventional hotel.

According to CoStar, hotels currently hosting migrants have cordoned off about 16,500 rooms of available hotel supply, leaving nearly 122,000 rooms available for travelers. Compared to just before the coronavirus pandemic, there are now about 2,800 fewer rooms available for travelers in the city.

“Try to get a hotel in Midtown Manhattan on a Tuesday, Wednesday or Thursday night during peak times. If you can, you could end up paying dearly for it,” Daniel H. Lesser, president and chief executive of LW Hospitality Advisors, told the Times. “It all depends on supply and demand, and the migrant rooms have reduced the supply.”

Immigration has emerged as a defining issue in the 2024 presidential campaign, with voters widely disapproving of President Joe Biden’s handling of the issue, while former President Donald Trump is trying to use immigration to attract Republicans and independents to his campaign.

Since 2022, more than 180,000 migrants have arrived in New York City – tens of thousands were sent by Texas Governor Greg Abbott in protest of Biden’s immigration policies. Mayor Eric Adams faced enormous financial and logistical challenges to accommodate the migrants.

New York’s hotel market was hit hard in 2020 as business travel plummeted and the city – once the epicenter of the COVID-19 pandemic – struggled to recover from the resulting economic fallout.

But the city’s hotel market has seen a strong rebound over the past year, and according to the Wall Street Journal, the city could see a $380 million increase in hotel revenue this year. If the projections prove accurate, it would be a stunning turnaround given the challenges the travel industry has faced during the pandemic.

Read the original article on Business Insider