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Boutique Hospitality Insights: NYC Hotel Rates Soar, Shifting Tipping Trends, and Investment Optimism for 2025

As the boutique hospitality industry continues to evolve, staying informed is critical for executives navigating new opportunities. At BLLA, we bring...

As the boutique hospitality industry continues to evolve, staying informed is critical for executives navigating new opportunities. At BLLA, we bring you the latest stories each week in our BOUTIQUE WEEKLY newsletter, designed specifically for boutique hotel executives seeking a competitive edge.

Here’s a glimpse of what we’re covering in this week’s edition:

“New York City Hotel Rates Soar to Record Heights as Holiday Travel Nears” by The New York Times

As New York City heads into the holiday season, hotel rates have hit unprecedented levels, averaging $417 per night in September—marking the highest monthly rate recorded since 1987. With demand soaring, 91% of rooms were occupied in September, but the city’s rising prices are leaving many visitors frustrated. “I don’t understand how normal people can go there, especially if they have kids,” said tourist Rahul Chhibber, who opted for an Airbnb in Yonkers. Meanwhile, hotel developer Richard Born emphasized the necessity of high rates: “Were it not for the $400 rate in October, you could not survive.”

Despite these price hikes, the city projects a record-breaking 68 million visitors in 2025. However, concerns linger about accessibility. Theo Yedinsky of Airbnb remarked, “New York can’t just be a place that the rich get to visit,” raising questions about the balance between exclusivity and inclusivity in the city’s hospitality landscape.

“Are Customers Tipping More? Here’s What the Data Says” by Restaurant Dive

Tipping trends across the U.S. are shifting, with 60% of consumers expressing frustration over the growing expectation to tip for services. Brendan Sweeney, CEO of Popmenu, noted, “The continued squeeze on consumer bank accounts is impacting restaurants and other industries that are heavily reliant on tips.” While tipping rates at restaurants remain steady at an average of 18%, fewer customers are leaving 20% or more.

Gusto’s recent report highlights a nuanced landscape, with tipping increasing at bakeries and coffee shops but slightly declining at full-service restaurants. “Employees in these industries typically depend on tips as a regular part of their income,” Gusto stated. As some establishments experiment with service charges in place of tips, the industry is reevaluating traditional practices to adapt to evolving consumer preferences and economic pressures.

“Hotel Investment Expected to Increase in 2025” by Skift

Optimism is surging in the hotel investment sector, with 80% of investors planning to maintain or increase their investments over the next year, according to JLL’s Global Hotel Investor Sentiment Survey. “This project exemplifies our dedication to identifying and creating unique luxury hospitality projects,” said J. Allen Smith, CEO of Mohari Hospitality, who recently announced plans to revitalize the iconic Hôtel Saint-James & Albany in Paris.

Investors are focusing on opposite ends of the spectrum—luxury assets, praised for their strong performance, and extended-stay hotels, valued for their consistent returns. A record 27% of this year’s investment volume has come from first-time buyers. However, challenges persist, with 54% of investors reporting a rise in the cost of capital. Despite this, 95% expect borrowing costs to stabilize or decrease in 2025, driven by easing inflation and interest rate cuts.

CBRE forecasts a promising outlook for U.S. hotels, with RevPAR growth reaccelerating by Q4 2024 and continuing into 2025. “Investors are gravitating toward platforms that drive shareholder value,” said CBRE, signaling a strong year ahead for the industry.


If these stories sparked your interest, you’ll love what we have in store each week. BOUTIQUE WEEKLY delivers 12 of the top headlines in boutique hospitality straight to your inbox, making it essential reading for executives and industry insiders alike. From luxury hotel openings and groundbreaking design to hospitality innovations and investment insights, we bring you the latest from every corner of the boutique hotel world.

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