- New York’s hotel construction pipeline is about a third of its 2020 level, per the State Comptroller, while 24 projects with 5,778 rooms remain in active development through 2028.
- Manhattan occupancy has topped 80% in most submarkets in 2026, and 2025 average daily rate hit a record $333.71, though real RevPAR beat 2019 in only four months.
- Special-permit rules since December 2021 and the Safe Hotels Act have choked new supply, which hoteliers say could leave the city under-hoteled as visitors pass the 2019 record.
Hotel builders in New York are active again, but not by much. The NYC hotel pipeline has shrunk to roughly a third of its 2020 size, per a new State Comptroller report that Bisnow cites.
Even so, the city leads the nation in occupancy, and industry leaders warn it could soon face a room shortage. Vijay Dandapani, who leads the city’s hotel trade group, expects visitor counts to top 2019 by 2028, possibly as early as next year.
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A Strong Operating Year
CoStar’s Didio Pequeno said most Manhattan submarkets have run above 80% occupancy in 2026, compared with 66.4% nationally in August. Midtown South reached 86% through August.
Visitors totaled 65 million last year, just short of the record, and the city’s tourism agency forecasts 66.3 million in 2026. Last year’s record daily rate of $333.71 and RevPAR of $280.71 beat 2019 in nominal terms, but after inflation RevPAR topped 2019 in just four months.
1710 Broadway under construction in April 2026
Three Midtown Towers Rising
At 1146-1150 Sixth Ave., a 41-story hotel designed by Stonehill Taylor is due in 2029. Permits from 2021 allow 310 rooms, and the site’s owner, Fortuna Realty, bought it for $39M in 2012 and shelved the hotel in 2020.
The Spanish chain RIU has its third city hotel rising where Broadway meets West 54th: 54 stories and 673 rooms, opening in 2027. RIU paid $172.8M in 2023, about $95M below what Extell paid in 2017.
Extell’s The Torch, on Eighth Avenue near West 45th Street, will hold 1,800 keys, plus a rooftop viewing platform and a 260-foot thrill ride. Construction had reached 40 stories by September.
Rules Limit New Supply
Nearly every new hotel proposed since December 2021 requires a discretionary City Planning Commission special permit. Only two have won one: The Nell New York at Rockefeller Center and a 1,000-key hotel at Willets Point. Earlier projects were grandfathered.
Two other policies cut both ways. Local Law 18, effective 2023, all but ended short-term rentals, which helps hotels, while the 2024 Safe Hotels Act raises costs by requiring operating licenses and restricting subcontracting at larger properties. Nonunion hotels, about three-quarters of the total, feel that most.
Why It Matters
Tight supply and strong demand should preserve pricing power for existing owners, Dandapani and Pequeno said. Some longtime owners sold at a discount last year, including the 271-room New York Edition at $235M, 30% below its 2015 price, while buyers wagered on tourism.
Builders nationwide also face expensive materials and thin labor pools, Pequeno added, a problem he links partly to tougher federal immigration enforcement.
What’s Next
The 5,778 rooms still in the pipeline could pressure other hotel markets in the short term, Pequeno said, but New York’s demand should support performance over time. Watch whether permit rules loosen and whether visitor counts beat 2019 sooner than expected.
