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Proposed New York Hotel Development Rules Could Cost City $7 Billion

Proposed New York Hotel Development Rules Could Cost City $7 Billion
Joe Cortez

As New York City aims to fully reopen to visitors by July 1, 2021, a proposed rule before the city council could hurt more than it would help tourism. Analysis of a new policy to limit hotel construction is projecting up to $7 billion in lost tax revenue if it were to be implemented.

With more and more Americans getting vaccinated against COVID-19, New York City wants to open doors and welcome tourists back by the start of July 2021. However, a proposed regulation which would cap new construction could end up losing the city up to $7 billion in tax revenue. New York real estate blog The Real Deal reports an analysis of the plan projects the major losses if it were to become law.

Analysts Worry New Regulations Could Stop All Hotel Construction

The new regulations proposed by current mayor Bill DeBlasio would require any new hotel construction to pass through the city council before work could begin. The plan is intended to benefit unionized workers by reducing the number of non-organized shops across the city.

The good intentions could ultimately backfire on the city, as analysts worry that the extra complications could prevent new hotels from entering the New York market. If passed, a city analysis suggests New York could lose out on $350 million in tax revenue over the next four years, and up to $7 billion by 2035.

DeBlasio’s move comes as city and state officials work to encourage travelers to visit the city and spend their money at hotels, restaurants and attractions. According to NBC New York, both the embattled mayor and state governor Andrew Cuomo hope to fully reopen the city by July 1, 2021. Cuomo said that reopening the city would bring “everything back to normal.”

Concerns Come as Hotels Pull Stops to Welcome Travelers Again

The proposed complications come as hotels are doing everything they can to welcome travelers back to their hotels as the industry comes back to life. Multiple hotel chains – including Hilton Honors, World of Hyatt and Wyndham Rewards – significantly slashed their elite status requirements for 2021, in hopes that their loyalist guests would continue to stay at their brands.

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1 Comment

  1. JackE

    May 11, 2021 at 11:16 am

    Destroying the freedom and livelihoods of non-union workers is politics, not “good intentions”.

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