New York City has long been a popular tourist destination. There's just something about the city's bright lights, theaters, stores, and diverse restaurant scene that makes it a popular year-round hotspot.
But the streets of New York City were disturbingly empty for the bulk of 2020, and that's not just because so many residents were doing their jobs from home. Tourists also stayed away from the city.
Last year, the number of visitors to New York City fell by a whopping 67% to 22.3 million, compared to 66.6 million in 2019. And the economic toll was massive. New York City's tourism industry saw its revenue decline by 75%, plunging from $80.3 billion in 2019 to $20.2 billion in 2020.
But 2021 is gearing up to be a very different year for New York City. In fact, areas like Times Square are already seeing an uptick in foot traffic, and that's ahead of New York City's full-fledged reopening, which is slated to happen on July 1. At that point, restaurants and businesses alike will get the go-ahead to welcome customers with no capacity restrictions, and once that happens, tourism could really take off.
A blockbuster summer
New York City relies heavily on tourism, and to that end, the city is embarking on a $30 million marketing campaign to attract visitors to come to the Big Apple. Meanwhile, marketing firm NYC & Company projects that 10 million visitors will flock to New York City this summer, and tourist numbers could get even stronger once Broadway reopens in September.
Of course, an influx of tourists may be loathsome for New York City residents, who often bemoan the city's crowded nature. But for local real estate investors, higher visitor counts could lead to a serious uptick in revenue.
New York City hotels, for example, have seen little demand since the pandemic began. In December of 2020, during the peak of the holiday season, their occupancy rate was just 36%, down from 88% the year before. But with tourism on the rise, that could easily change for the better.
Similarly, an increase in tourism could work wonders for local businesses and restaurants, many of which saw serious revenue declines not just in 2020, but also during the early part of 2021. Short-term rentals in and around New York City could also skyrocket this summer, which property owners are well poised to profit from.
Great news for a struggling city
Over the past year, New York City has grappled with a mass migration toward the suburbs, empty office buildings, and high levels of unemployment. The city needs visitors to come in and spend money at stores, restaurants, hotels, and other businesses to give its economy the boost it needs.
While it may be too soon to predict what tourism revenue will look like this year, so far, 2021 is shaping up to be a wildly better year than 2020. And that alone should give New York City real estate investors a reason to not lose hope.