New York City Tourism Revenue Hits Record High, Surpassing Pre-Pandemic Levels

Key Takeaway

• New York City's tourism tax revenue hit a record $4.9 billion, driven by 62.2 million visitors and higher service prices.
• Domestic travel surged with 50.6 million U.S. visitors, while international travel remains below pre-pandemic levels at 11.6 million.
• Despite challenges, NYC remains the top U.S. tourist destination with 33 million overnight visitors in 2023, surpassing Las Vegas and Los Angeles.

Tourism Revenue Surpasses Pre-Pandemic Levels

New York City’s tax revenue from tourism has exceeded pre-pandemic figures, driven by a surge in domestic visitors. According to a report released by state Comptroller Thomas DiNapoli on Thursday, 62.2 million people visited New York City last year. Although this is a decrease from the 66.6 million visitors in 2019, the tourists are expected to generate a record $4.9 billion in sales and other tourism-related tax revenue in the current fiscal year. This represents a 16% increase from 2020, largely attributed to rising prices for hotel rooms and other services.

The Covid-19 pandemic, which began in early 2020, severely impacted New York City, causing significant loss of life, devastating the office and retail markets, and prompting many residents to move to the suburbs or other states. Despite these challenges, the city has been gradually recovering economically, with visitors returning to Broadway shows, museums, and other attractions.

Tourism officials had initially hoped to surpass pre-pandemic visitor levels this year. However, the slower-than-expected return of international travelers has led them to revise their forecast, now expecting to host 68 million visitors by 2025. DiNapoli emphasized the importance of international and business travelers for the industry’s full recovery, stating, “Our city and state leaders need to focus on keeping New York a desirable and safe destination for individuals and families from around the world.”

Domestic Travel Leads Recovery

Domestic travelers have been pivotal in New York City's tourism rebound. Last year, 50.6 million U.S. visitors came to the city, marking a 7% increase from 2022. In contrast, international visitors, who typically constitute about 20% of the city’s annual tourists, have not yet returned to pre-pandemic levels. In 2020, international travel plummeted by 82.2% to 2.4 million visitors, primarily due to travel restrictions. Although this number rebounded to 11.6 million last year, it remains 14.1% below pre-pandemic levels.

Business travel, both domestic and international, has also been slower to recover compared to leisure travel. The number of business travelers fell from 3.4 million in 2019 to 400,000 in 2021 but has since increased to approximately 2.3 million. Despite these gains, the overall New York City tourism industry is still down by about 30,000 jobs, or 10.4%, from pre-pandemic levels, according to DiNapoli.

Even with these challenges, New York City remains the top U.S. tourist destination, attracting 33 million overnight visitors in 2023. This places it ahead of other major cities like Las Vegas, which had 26 million overnight visitors, and Los Angeles, with 21 million.

Economic and Political Context

The broader economic context also plays a role in New York City's tourism dynamics. The U.S. economy has shown resilience despite political turmoil, which has included events like the Tea Party movement, the presidency of Donald Trump, and ongoing culture wars. This economic strength has been evident in the spending power of U.S. tourists, who have helped offset the decline in international visitors.

The material success of the U.S. economy, despite political instability, is a notable phenomenon. As long as essential state functions such as physical security, contract enforcement, and tax collection remain intact, the economy can continue to thrive. This resilience is contrasted with other countries like Germany, where political stability has not necessarily translated into economic success.

Management Quotes

• Thomas DiNapoli, New York State Comptroller:

  "The industry’s full recovery won’t be complete until we see a full return of international and business travelers. Our city and state leaders need to focus on keeping New York a desirable and safe destination for individuals and families from around the world."