Upscale Markets

Abstract

Although New York City and Washington, D.C., are both large, gateway cities located on the Atlantic seaboard, their upscale hotel markets are not as similar as one might predict. New York's hotels achieve higher rates but have higher costs than those in Washington. Moreover, New York has a top-level class of hotels, known as car- riage-trade hotels, that does not exist in Washington. Those hotels are generally patronized by price-insensitive clients. In contrast, New York's other class of upscale hotels, its luxury hotels, are similar to most of Washington's high-line hotels in that they depend on business guests and meetings. Not surprisingly, Washington's business is driven mostly by government demand, and its hotels have slack periods for the five months that Congress is out of session. While both mar- kets have seen occupancy and room rates decline some- what, New York has been steadier than Washington.