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Lesser: 24-Hour High-Barrier Cities' Hotels to Thrive

NEW YORK CITY-Daniel H. Lesser, Cushman & Wakefield's senior director of the Hospitality Industry Group, predicts that cities with high entry barriers will make it through the downturn and succeed in the long term.

By Amy Vaughn | Updated on June 21, 2001

NEW YORK CITY-Cushman & Wakefield’s senior director of the Hospitality Industry Group Daniel H. Lesser has issued a look at the national hotel sector and predicts that cities with 24-hour activity and high barriers to entry will not only survive the current economic downturn, but will thrive in the future. He says the current drop-off in hotel occupancy is “all relative.”

“We had a booming economy in 2000,” he explains. “We are going through a correction now, just like the economy as a whole. For example, with New York finishing last year with an occupancy in excess of 83%, even if 2001 ends up 10% lower, which is highly unlikely you would still have a hotel market achieving 75% occupancy, which is considered a solid performance by the industry.”

He notes refinancing trends and the current increase in vacant rooms, but says not to worry. “Typical investors purchase hotels in these types of locals to hold them for 5 to 10 years,” he says. “Markets such as New York, San Francisco, Washington, DC and Boston are anticipated to remain relatively strong.” He adds, “Over supply has tended to have much more of an impact on occupancy rates than lack of demand caused by a temporary downturn in the economy.

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