HVS� and NYU�s findings indicate that in the first quarter of 2001, more than 3,000 new hotel rooms entered the market and although demand declined only minimally from the record high levels achieved during the same period last year, the new rooms resulted in a 7.6% decline in occupancy and a 5.8% decline in revenue per available room.

�Despite the economic downturn that the region and the country have experienced in the last several months, demand for New York City hotel rooms fell only slightly from the record high levels achieved in 2000, and yet far exceeds the demand levels of 1998 and 1999,� explains Frank Dougherty, senior vice president of HVS International, and co-author of the survey. �The real cause of the downturn in the hotel market is the new supply that entered the market during the course of the last year.�   

Going forward, the survey reveals that 4,879 new rooms will enter the market over the next five years, with the bulk of the new supply coming on board this year.  This represents an 8.3% increase in supply over 2000 figures, which will add to the already negative impact on occupancy, while average rate growth will continue to slow.

Dougherty and fellow HVS Associate Michael Hay, assisted by graduate students from The  NYU Tisch Center for Hospitality, Tourism and Travel Administration, collected and analyzed the data presented in this report. 

This year�s survey also explores the operating results of four distinct segments of the Manhattan hotel market:  boutique hotels, first class hotels, tourist hotels and luxury hotels.  The data indicates that the majority of the new supply adds to an already strong boutique hotel base in the Manhattan market.  The new properties strongly impacting the first-class and luxury market segments.  The tourist segment has seen the least amount of new supply and continues to perform at levels comparable to those achieved in 2000. 

�The dramatic findings of our study forces us to ask whether  New York City has reached a new threshold,� states Dean Lalia Rach of the NYU Tisch Center for Hospitality, Tourism and Travel Administration.  � The boutique hotels coming on line in New York are primarily not part of any global brand or large chain, and thus their marketing is primarily by word of mouth.  In this high-tech world of ours, it appears that the �high-touch� hotels are excelling at the customer loyalty game.

HVS International was created in 1980 to satisfy the growing demand for reliable and well-documented hotel market studies and feasibility reports.  With eleven offices around the world, HVS offers a wide range of services including valuation, strategic analyses, development planning, litigation support, executive search, operational and management strategy development, and marketing communications, among others.

The Preston Robert Tisch Center for Hospitality, Tourism and Travel Administration at New York University is a dynamic and growing educational research center located in the heart of Manhattan.  The Center offers two bachelors and four master�s degree programs.  Coursework is focused on asset management, financial analysis, revenue management, customer relationship management, information technology and e-commerce.