City's Tourism Industry May Be Weakening, After Strong 2007

New York City's tourism industry may be starting to slow after a record year in 2007 and months of continuous growth this year.

The city's hotel occupancy rates fell to 87% in April, down from 88.4% a year earlier, according to a monthly report issued by the city's Economic Development Corporation.

The 1.4% drop in hotel occupancy, long seen as a barometer of the health of the city's critical tourism industry, comes after three months of year-to-year growth and is the largest decline for any month in 2008, according to statistics provided by the city.

Due in large part to a weakened dollar, New York City tourism has been growing at a healthy clip for well over a year and has become a focal point of the Bloomberg administration. In 2000, hotel occupancy rates were at around 84% but dropped to a ten-year low of 73% in 2001. The occupancy rate has increased every year since, but some experts fear the record number of tourists now visiting New York will decline because of weakening American and European economies.

Additionally, the Economic Development Corporation is reporting a decrease in Broadway ticket sales. In the four weeks ending May 25, Broadway attendance was around 1.1 million, 3.3% less than the same period last year. Broadway revenue in this period was around $79 million, a 2.8% decrease from the same period last year.

A former chief city economist, Jonathan Tepper Marlin, said hotel occupancy and Broadway ticket sales are telltale signs of the health of the tourism industry. But he said the declines were not enough to merit major concern, at least not yet.

"One swallow doesn't make a summer," he said. "But I would be concerned that I am losing market share to someone else."

Last year set records for tourism and business travel in the city, and 2008 has been on track for another record year. According to the city's marketing and tourism agency, NYC & Company, about 1 million more visitors came to the city in the first three months of 2008 than in the first quarter of last year.

A spokesman for NYC & Company, Christopher Heywood, said the declines were not enough to be of major concern and noted several upcoming summer tourism draws, including the Major League Baseball All-Star Game, the final season at Shea and Yankee stadiums, and the Olafur Eliasson waterfall exhibit.

"New York City continues to do much better than the rest of the country, and the occupancy rates are quite high. We continue to see momentum as a result of the weak dollar from international markets, and that is a market that tends to stay longer and spend more money while they are here. If it is a minimal drop it is not of particular concern to us," Mr. Heywood said.