Can’t Afford To Visit New York City for Christmas? Blame the City Government.

People come from around the world to experience all that New York City has to offer during the holidays, including watching the Radio City Christmas Spectacular, ice skating at Rockefeller Center, and watching the ball drop in Times Square. (As a New York native, I don’t recommend this last one.) But the city government’s misguided hotel policies are, like the Grinch, stealing Christmas joy from would-be tourists: Spending a weekend in Manhattan can easily set you back a couple thousand dollars—unless you’re willing to sleep in a pod.

Today, the average daily rate for a hotel room in the city exceeds $300, but it wasn’t always this expensive to stay in NYC. In fact, in the nearly 15 years leading up to the COVID-19 pandemic, the city’s average daily rate (ADR) was declining in inflation-adjusted terms. After reaching a pandemic low of $144, NYC’s ADR has risen steadily, reaching $314 in 2024, according to the New York State Comptroller’s Office. Meanwhile, “gross profitability in this market grew 47.1 percent from 2022 [to 2023], the highest among the top 25 U.S. hotel markets,” per the comptroller.

While some of this price hike can be attributed to tourists returning to the Big Apple after the pandemic, much of it is attributable to government intervention.

In 2021, the City Council passed the ​​Citywide Hotels Text Amendment, which was backed by the Hotel Trades Council union. This law required every new hotel or hotel expansion to receive City Planning Commission approval before beginning construction. At the time of the bill’s passage, city budget officials estimated that the law would cost the city $350 million in lost revenue by 2025 while perpetuating the hotel room shortage.

As the city made it harder to build, it redistributed a large portion of existing supply to nonpaying residents: The city housed “a portion of [60,000] asylum seekers in mostly midscale and economy hotels throughout the City [in the beginning of 2024], with the City…spending an ADR of $156 per room,”or less than half the going rate, according to the comptroller. New York City Comptroller Brad Lander estimated in July 2024 that “77 percent of asylum seekers live in approximately 15,750 rooms across 157 hotels in New York City.” This demand pressure won’t abate anytime soon: The city’s contract with the Hotel Association of New York City to house 86,000 asylum seekers and homeless people was renewed for $929 million to run from January to June 30, 2026, per the New York Post.

Short-term rental sites such as Airbnb—which hosted 38,500 units in the city in 2023—could have provided tourists with an affordable substitute for these asylum seeker–occupied hotel rooms. However, in September 2023, the city passed Local Law 18, which forbids “renting [out] units for less than 30 days.” While the law failed to make housing more affordable, it succeeded in reducing rooms available to tourists: As of September, there were only “about 3,000 short-term rentals operating legally,” per The Wall Street Journal.

The supply of hotel rooms has grown since then, rising from 121,500 in 2023 to 135,000 in 2025. Unfortunately for tourists, this 13,500 increase is dwarfed by a 35,500 reduction in short-term rentals. Altogether, the total number of rooms available decreased by more than 13 percent from 160,000 in 2023 to 138,000 in 2025. Meanwhile, only 5,700 more hotel rooms are anticipated to open this year.

Unfortunately, the city’s heavy-handed approach to housing does not appear to be going away anytime soon. Until New York City decides to let landlords use their private property as they see fit and makes it substantially easier for developers to build hotels, you’re probably better off taking the PATH train in from Hoboken or Jersey City when visiting the Big Apple.