Albany, the capital of New York, is a significant port and buying and selling heart for the state. As such, state authorities buildings dominate town’s skyline, and authorities actions dominate the financial system. The financial base is nicely supported by the schooling, authorities, army, and healthcare sectors, in addition to the superior manufacturing trade. Its location in New York’s “Tech Valley“ makes it a technological and academic hub.
On this article, we discover three resort units inside Albany’s lodging market:
- Midscale to upper-upscale properties within the Downtown Albany market
- Financial system to upper-midscale properties within the Albany Worldwide Airport market of Latham, New York
- A set of extended-stay motels in Albany given the nationwide consideration on extended-stay motels for the reason that pandemic and the sturdy provide progress on this phase inside Higher Albany
We be aware that the Albany market doesn’t include any luxurious properties.
Downtown Albany Submarket
The Downtown Albany submarket information proven beneath is made up of midscale to upper-upscale properties, together with the Vacation Inn Specific Albany Downtown, 4 Factors by Sheraton Albany, and Renaissance Albany Lodge.
The Downtown submarket has sturdy employers in schooling, authorities, well being care, and tourism and leisure. A major and pioneering improvement is taking form on this submarket on the Port of Albany: the forthcoming 100-acre Albany Port District Fee (APDC) offshore wind-tower manufacturing facility. This groundbreaking challenge represents the primary of its sort in america and holds immense promise. It’s anticipated to create between 500 to 1,000 building jobs, appeal to tons of of thousands and thousands of {dollars} in direct funding, and stimulate extra group investments. Tower manufacturing is slated to start in 2024.
The next charts illustrate the historic occupancy and common every day price for the midscale to upper-upscale motels within the Downtown Albany market space, supplied by Kalibri Labs.
Albany—Downtown Submarket
The Downtown Albany resort set was hit hardest by the pandemic when in comparison with the airport and extended-stay resort units. In 2020, the Downtown submarket skilled a staggering 50% occupancy drop and an virtually 18% decline in common every day price (ADR). The closure of government-related places of work and companies considerably restricted demand on this space.
Nonetheless, the submarket has displayed outstanding resilience in its post-pandemic restoration. Though exhibiting substantial enchancment by the tip of 2022, occupancy had not returned to pre-pandemic ranges. Nonetheless, when accounting for the provision progress since 2018, whole occupied room nights had been really barely above the 2019 peak stage in 2022. The 2022 ADR for Downtown Albany, just like a lot of the nation, surpassed pre-pandemic ranges.
The sturdy authorities demand within the Downtown Albany market resulted in each the extreme decline and fast restoration from the pandemic, as demand from lobbyists and exercise tied to the New York State Meeting has considerably elevated. This space can be much less reliant on business enterprise journey, which has been slower to recuperate. As such, we forecast occupancy to proceed its restoration on this market, returning to pre-pandemic ranges by 2024.
Albany Worldwide Airport Submarket
The Albany Worldwide Airport market space is positioned north of town in Latham, New York, and contains some properties alongside the Wolf Highway hall. This resort set primarily includes financial system to upper-midscale motels, such because the Microtel Inn by Wyndham Albany Airport, High quality Inn & Suites Albany Airport, and Vacation Inn Specific & Suites Latham.
Traditionally, demand on this submarket was generated by monetary establishments and know-how corporations reminiscent of Basic Electrical and GlobalFoundries, native authorities entities, space universities/faculties, and contract demand from airline crews.
The next charts illustrate the historic occupancy and common every day price for the financial system to upper-midscale properties within the Albany Worldwide Airport market space, supplied by STR.
Albany—Airport Submarket
Whereas the Albany Worldwide Airport market space was not as closely affected by the pandemic in 2020 because the downtown market, this submarket has been the slowest to recuperate. It has traditionally relied on business and enterprise journey demand, and the return to places of work has been restricted by distant work and workplace closures. Thus, this market’s occupancy has but to recuperate to pre-pandemic ranges. By year-end 2022, occupancy for the Albany Worldwide Airport market space was nonetheless roughly 11% beneath 2019 ranges. Nonetheless, the January 2023 information present an extra enchancment.
2018–YTD 2023 ALB Passenger Statistics (in Tens of millions)
As illustrated within the chart above, passenger site visitors has but to recuperate to pre-pandemic ranges.
Regardless of a decline in business demand from massive corporations like Basic Electrical, Goldman Sachs, and IBM resulting from elevated distant work, smaller tech corporations are filling the hole. With no new provide since 2018 and the resurgence of worldwide journey and office-space occupancy, the airport market’s financial restoration is anticipated to proceed.
We challenge occupancy for financial system to upper-midscale properties on this submarket to proceed a gradual restoration, remaining within the excessive 50s within the close to time period and returning to the low 60s by 2027/28.
Prolonged-Keep Motels in Albany
The extended-stay information for the Higher Albany market space contains extended-stay properties within the Downtown Albany and Albany Worldwide Airport submarkets. This phase is essentially made up of midscale to upscale motels, such because the Prolonged Keep America Albany, TownePlace Suites Albany Downtown Medical Middle, and Residence Inn by Marriott Albany Airport. Prolonged-stay lodging demand on this market is primarily pushed by building exercise, healthcare employees, displaced and relocating residents, and coaching occasions within the space, significantly on the New York State Police Troop Headquarters and the Nationwide Guard.
The next charts illustrate the historic occupancy and common every day price for extended-stay midscale to upscale properties within the Higher Albany market space, supplied by STR.
Higher Albany—Prolonged-Keep Lodge Efficiency
This set of extended-stay motels carried out higher than the 2 different resort units explored on this article. In 2020, the extended-stay phase’s occupancy declined by roughly 17% and ADR by roughly 14%. This phase has additionally gained essentially the most new provide, with 20% progress from 2018 to year-end 2020. Moreover, the restoration was swift. By year-end 2021, occupancy had already surpassed pre-pandemic ranges. ADR additionally improved that yr however remained beneath peak charges achieved in 2015. At the moment, extended-stay provide was roughly 30% decrease, permitting hoteliers to cost a premium. Yr-end 2022 information present a slight softening in occupancy, indicating a stabilization within the mid-to-high 70s for this phase, whereas ADR has surpassed pre-pandemic ranges.
Occupancy is forecast to stay secure in 2024/25, whereas ADR is anticipated to proceed to develop. The ADR progress will happen at a slower tempo than skilled within the final two years of restoration, extra according to a nationwide inflationary price of three.5%.
Conclusion
Whereas the motels in these samples will not be an exhaustive checklist of Albany’s resort provide, these three resort units illustrate how the Albany market space has carried out all through the pandemic and up to date restoration. We count on additional enhancements to each occupancy and ADR within the total Albany market, which ought to be bolstered by elevated authorities and business exercise and improved worldwide journey. With a major initiative in renewable vitality manufacturing deliberate and new know-how corporations coming into the market, the outlook for Albany and its submarkets is optimistic.
For extra data on this market or to inquire a couple of particular resort challenge, please contact Robert Fitzpatrick or Christian Cross with our higher New York crew.
