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Brian Lehrer: Brian Lehrer on WNYC. We'll take a look mostly now at the rebound of tourism in New York City, a strong rebound post-pandemic but with some interesting and perhaps threatening holes. Visitors have been flocking to the US Open in Queens, contributing to record attendance that generates so much tourism income outside the tennis center, while jobs in hotels and restaurants have seen a boost of almost 10% in the past year.

Hotel occupancy has seen a significant increase from last year, and room rates have surpassed pre-pandemic levels. That's occupancy rates. Despite these mostly positive developments, the city probably won't surpass its 2019 record of 66.6 million visitors, and investors are uncertain about the future. One reason, tourism from one really, really big country has not rebounded.

With us now to delve into the factors driving the rebound and the challenges that lie ahead for the tourism industry, one of New York's biggest and most important is Greg David, contributor covering fiscal and economic issues for the news organization THE CITY, as well as director of the business and economics reporting program at the Graduate School of Journalism at CUNY. Hi, Greg. Always good to have you. Welcome back to the show.

Greg David: Thank you very much. Always good to be back.

Brian Lehrer: Can I actually take a minute with you and make a transition from the last segment?

Greg David: Yes.

Brian Lehrer: Since you look at these things constantly too, and get your quick take on migrationomics in New York City? Adams is saying that the current pace of things will "destroy" the city largely because of $12 billion in anticipated deficits over the next three years. At the same time, I mentioned in the last segment, there was a Crain's story earlier in the year that had the headline of 56% drop in immigration. Drop in immigration is hampering New York's recovery. Where do you come down on all this?

Greg David: I wrote a story a couple of months ago and I used the-- at the time, the mayor said that the migrants would destroy the city, although, at that point, he meant it only in terms of the budget pressure. Now, he seems to have broadened that. Look, immigration has been crucial to New York. As a matter of fact, after we lost 800,000 people in the decade of the '70s, New York was headed to being a supersized Boston, and what saved the city was migration.

The laws were changed and we began to get many more immigrants from the Caribbean countries and from Asia. They went to the city's poorest neighborhoods because that's what immigrants do, and they led the city's revival by building up those neighborhoods. I went out and I talked to economists and historians, and they're universal in their belief that immigration is important to the country and to New York. We probably have fewer people in the city than we did before.

I certainly understand the short-term pressures, and it's a result of some changes because when immigrants came in the '90s, they didn't seek government help, and they didn't try to use the city's right to shelter. They just blended in because they were afraid if they had done that they would be deported. Well, today, those asylum seekers don't have to worry about being deported so they can take advantage of the city's right to shelter law, and that clearly is creating short-term issues.

The $12 billion figure is interesting that over four years the city's budget over those four years is more than about $420 billion. Is it significant? Yes. But is it overwhelming the budget? Probably not.

Brian Lehrer: You just said the 1970s New York fiscal crisis almost led us to become a supersized Boston. Now, I know we hate the Red Sox, but what kind of a diss on Boston was that?

Greg David: [laughs] Sorry about that. It was just that we were going to become a much less significant city. The immigration we saw was one of the key factors that led New York to re-establish itself as the most important, most dynamic, and most economically successful city in the country.

Brian Lehrer: All right. To your article on tourism post-pandemic, let's start with a piece of encouraging news here in Times Square. You report that 179 businesses closed in Times Square during the pandemic, but as of this month, more businesses have opened in the area than were shuttered since March of 2020. Greg, tell us about it.

Greg David: Well, clearly tourism is back. I work in Times Square and it's pretty busy. Tourists have come back in really big numbers. We're having a major increase over last year and you can see it in Times Square, and what's important, of course, about that number that enough businesses have decided to open in Times Square as we know that the office workers aren't back in the kinds of numbers we'd like to see. Those businesses are betting that the tourists can sustain them, and that's what's happening in Times Square.

The Times Square Alliance says that it actually sees more foot traffic on some days than it saw in 2019 which is when we had the record years. Tourists are coming from elsewhere in the country and from abroad. Now, what's really significant that we have been able to do this rebound is I'm sure people have heard that Americans are overrunning Europe because they've all decided that this is the time to go to Europe. This gain has come despite the fact that many more Americans are deciding to travel abroad than did in recent years.

Brian Lehrer: Citywide, I see jobs in hotels and in restaurants are up, hotel occupancy rates are too. What's the economic reality, the bigger picture for hotels in New York City right now because we also hear that empty hotel space is one of the things that the mayor is utilizing for the migrants.

Greg David: Yes, so that's an interesting twist. Up to 10,000 rooms have been taken to house the asylum seekers. That was an estimate I got from hotel experts. The city would neither confirm nor correct that number. Now, most of these are the lowest-priced rooms that are available, the least desirable rooms that are available. Because of that, the Hotel Association has gotten the organization that tracks occupancy, STR, to take several thousand hotel rooms out of the database because they don't think they should be counted as part of the occupancy.

The other thing that's happened, say, the hotel experts I talked to, is this is allowing hotels to raise their rents, to raise their room rates more than they would have because we have less supply a part of the marketplace. Short term, it's good for hotels, the hotels that are doing good business because they've been able to increase their room rates a little more than they would have.

Brian Lehrer: It's not just occupancy rates that are up to pre-pandemic levels. You're saying it's per-night prices that have surpassed 2019?

Greg David: Occupancy is a little below 2019. The rates are a little above 2019.

Brian Lehrer: Listeners, we can take your calls about the tourism rebound in New York City for my guest, Greg David, from the news organization THE CITY. If you work in the hospitality business yourself, help us report this story. 212-433-WNYC, 212-433-9692. Call, or if can't get through on the phone, you can text that number or tweet us @BrianLehrer. Greg, I want to come back to the little tease that I dropped in the intro saying there's one really, really big country from which tourism has not rebounded. Want to go there?

Greg David: Yes, it's China. Before the pandemic in 2019, visitors from China had become the third largest group of international tourists we had. They spent more money than anybody else. They spent something like $3,000 on a visit when the average international visitor spends about $1,500. They had become a crucial part of the international tourism scene in New York. We're not back at all in the US. As a matter of fact, I have a figure in the story.

Flights between China and the US are only 10% of the pre-pandemic level, and Chinese visa group individuals aren't allowed to come yet and can't get visas to come. This is different because they are allowed to do all those things if they want to travel to France or England or other places in Europe. As the head of New York City and Company, I told a trade publication, the Chinese are the missing piece of the tourism rebound. That's why we're going to have about 63 million visitors this year, about 3 million short of our 66.6 million record for 2019.

Brian Lehrer: I'm going to take our first call for you, which is actually going to be on the same topic as our last call for the public advocate a few minutes ago. We'll explain why. Lisa in Manhattan, you're on WNYC. Hi, Lisa.

Lisa: Hi. Good morning, Brian. Thanks for taking my call. I want to speak to the shutdown this week of the short-term rental platforms in New York City and the effect of future visitors to New York.

Brian Lehrer: Meaning like Airbnb, right?

Lisa: Correct. Yes. I'm a travel agent. I've been one for 30 years, meaning I've been booking hotels and travel to New York City long before the internet. I'm also a founding member of RHOAR. We're an organization of one or two-family homeowners and short-term rental hosts, hoping to make some changes in the future. The ban this week of all short-term rental booking platforms basically the pandemic is long over and hotels have been at high occupancy levels for more than a year now. Hotel pricing is higher than ever in the past five to seven years.

Many hotels and airlines use computer programming called dynamic pricing. Dynamic pricing is an algorithm that pushes pricing as high as possible based on occupancy. This means that New York City will very quickly become completely unaffordable for visitors looking to visit unless they're wealthy. The shutdown of the booking platforms will dramatically increase the need for hotel rooms, which ultimately pushes pricing higher. The hotel lobby and special interest groups may have won their battle this week by engaging with the politicians over the years.

However, the losers are really the hundreds of thousands of visitors considering a visit to New York, and ultimately New York City and the New Yorkers will lose out. The only winners are corporate hotels with corporate headquarters that are not even located in New York. Let's be clear, while the city and the hotel lobby and the special interest groups may claim that short-term rentals are a public safety hazard, do we really think by shutting down the booking platforms means that short-term rentals will go away?

Brian Lehrer: Lisa, let me ask you one follow-up question from me before we let Greg in here. There's one huge aspect of this that you didn't mention that I think is the main impetus for these new restrictions, which is what affordable housing advocates say is taking so many potential rental apartments off the market to be used as Airbnbs. I think that's the main reason that housing advocates pushed for this law.

Lisa: Right, but they need to get their numbers right. I'm specifically talking about one and two-family homes. Our homes are not housing stock for the city. Yes, some of us have second units that we rent short-term, but I will never let my unit be used for long-term occupancy. I want control of my unit. I want to be able to use it for my family. I don't want to rent long-term. There's a lot of bad New York City housing-- The eviction laws don't work in my favor. I can't afford to risk having a long-term renter who's basically a squatter for years and then I'm financially put out.

Brian Lehrer: Lisa, let me get a reaction from Greg David, and of course, the hook to your article in THE CITY is if the hotels are full, then the Airbnbs aren't competing with them.

Greg David: Let's separate out the issues here. The tourism issue is, there are as many as 10,000 Airbnb listings most times. We don't think that 10,000 were filled every night, but there are 10,000 listings. Are those people who will say, "I'm coming to New York anyway and I will go to the hotels"? The average room rate, by the way, is $270 a night. I don't know what the average Airbnb room rate is. Yes, that's a question. Will the elimination of Airbnb units allow hotels to raise prices even more?

Will it mean that a group, and remember, we're only talking about a group of tourists, won't come? Those are good questions to answer. I know it seems that this conversation has really been centered on the one and two-family home issue, but look, there's no doubt that much of the Airbnb business in New York is illegal, that it involved people who thought it was financially beneficial to rent an apartment, use it as a hotel, and go live someplace else. I also think that there's good reason to believe that most of those units are rent-regulated because that's where the best return is.

If you have a rent-regulated unit, you can rent it out on Airbnb and go find a market-rate apartment and still come out way ahead. I think we need to separate the two issues. I know the public advocate was separating the one and two-family homes, but second units in two-family homes are another crucial part of housing stock. I have been writing an enormous amount about the housing crisis in New York, and there's no doubt that we need every possible unit to be used to help with the housing crisis. There are many other things we have to do, but that's one of them.

Brian Lehrer: Lisa, thank you for your call. Greg, here's a text that came in. A listener writes-- a listener appears to be an Uber and Lyft driver and says, "If there are that many tourists, they're not taking Ubers or Lyfts. It is the slowest I've seen it in six years." Have you analyzed that part of the industry?

Greg David: No. I think there are lots of different reasons why Uber and Lyft would be slow. I think the failure of the office workers to come back in big numbers would be part of it. My office is on the corner of 40th and 7th, and I want to tell you, I see the tourists lined up to take the buses every morning and they seem to be filling those buses, so I don't know specifically about that. There was a little bit of weakness in July, we went down a little bit, but people say the fall is looking better.

Certainly, what's happened at the US Open with record attendance shows that a lot of those people we know are tourists who come to New York and stay for a whole week and go to the Open every day.

Brian Lehrer: Do you have, off the top of your head, the financial impact of the US Open? I've seen it over the years.

Greg David: Yes, I do. I do.

Brian Lehrer: It kind of can blow your mind because you have 162 baseball games a year between the Yankees and the Mets. You have the Jets and the Giants, the Liberty, other sporting events, the three hockey teams in the metro area, and yet, the US Open, a few weeks of tennis, dwarfs a lot of that.

Greg David: 1.5 billion is our best guess. They haven't done a study in a while, and when they did the study, it was 790 million or something like that. They made that estimate in a story I read this week, and I actually, frankly, agree with it. Here's the difference, Brian. Most of those people in Yankee games are New Yorkers, so not necessarily from the city but from the region, and they're not staying in hotel rooms. That's a big part of it.

The second thing is compared with, say, when the Super Bowl was here, people come for a week. People come for two weeks, and yes, it is a mind-boggling impact. I will say that we should also point out the times to the story, the Sunday before the Open, that a lot of the benefit doesn't go to Queens, that the benefit goes to elsewhere in the city. I think that's true. The other number that really blew my mind is the Open hires 7,000 people to work for the, I guess, three weeks of the Open. 40% of them are from Queens, so I'd say that's a boost for the borough.

Brian Lehrer: Bernard in Brooklyn Heights, you're on WNYC. Hi, Bernard.

Bernard: Hi. Thanks very much. I want to give a shout-out to an organization called the Big Apple Greeter. I'm a volunteer with them and it's wonderful. We're volunteers. We're greeters, and we meet people from many countries and we just get them acclimated to the city. New Yorkers, we underestimate the extent to which people from all over the world are really captivated by New York.

Oftentimes, they want to see sections of New York, which are not the major tourist sites. I know you're a Queen's guy, Brian, so I often take them to Astoria or Jackson Heights, and one day I might get a request to show them the boyhood home of Brian Lehrer. I don't know where that was. Lastly, it's bigapplegreeter.org, and we definitely need more greeters. We have far more tourists now than we can handle, so please go to bigapplegreeter.org.

Brian Lehrer: My boyhood home was east of there. Not much to see for tourists on that residential block. Definitely keep them going to Astoria and definitely Jackson Heights. Greg, that's a nice story, right?

Greg David: It is. Remember before the pandemic, tourism was basically accounting for 330,000 jobs in the city. The other thing it's important to recognize about the tourism industry, it's while there are a lot of low-paying jobs, there are also very well-paying jobs. The industry is heavily unionized. Hotel workers make $80,000 a year these days. It's a very crucial part of the city's economy. It's one of the reasons that we did so well in the period from 2009 to 2020. Tourism became a crucial part of our economy, helped to reduce our dependence on Wall Street, and led to what I like to call the Bloomberg/de Blasio boom.

Brian Lehrer: Despite the strong rebound in the tourism industry that we've been talking about, you also write in your article that investors are not convinced about the future. What are their concerns?

Greg David: I guess they think that we don't know how long it will last. The best example, which I used in the story is the Sheraton New York Times Square, the third largest hotel in the city with 1,800 rooms, sold last year for $346 million. That was half of the $738 million it sold for in 2006. We also have hotels that have mortgages coming due. When they try to refinance, of course, the interest rates are higher.

We've got a big lawsuit over the Margaritaville about whether it's going into foreclosure, and there are several other hotels that are in foreclosure as well. Investors remain skeptical that this is going to continue. I'm not exactly sure why. I don't know if we're going to set records every year, but I don't see our tourism industry falling apart, but they're pretty skeptical.

Brian Lehrer: I want to acknowledge to the listeners calling in and texting as we start to run out of time and have time for one more call that despite the larger frame of this conversation, Greg, around your article about the rebound of the tourism industry, the things that have really gotten the phones ringing off the hook is that one caller about Airbnb in small units. I'm going to respect that surge of callers by taking one more on that, and it's Tony in East New York. Tony, you're on WNYC. Hello.

Tony: Yes, hi. How are you?

Brian Lehrer: Good.

Tony: I was calling because I wanted to correct the record as I heard it stated earlier, where Mr. David said that two-family homes, that our units were this default part of the housing stock in New York City, and nothing could be further from the truth. I think what we're doing is we're somehow scapegoating smaller landlords with the responsibilities of the housing stock problem that has been created by a very wealthy group of people, and we continue to ignore that. We push these broad policies that always sweep up the middle class and working poor.

For example, in New York City, we have more than 60,000 rent-stabilized units that are being intentionally held off of the market. You have greedy investors that have leased dozens of apartments across this city to set up these huge Airbnb operations, where they were touted on the news by former mayor Bill de Blasio, Jumaane Williams as well, the public advocate, and also this current mayor, Mayor Adams. We also are stuck with this problem of private equity firms that are buying up all the residential properties in NYC.

How do you help the housing stock problem by forcing thousands of hardworking people into a position where they may lose their homes in a completely unaffordable city? I think this conversation is glazing over the real problems that the middle class is experiencing in this city, and it's being scapegoated to characterize people like myself who lived-- I live in East New York, one of the poorest neighborhoods and under-resourced neighborhoods in New York City.

I engage in STRs, short-term rentals, just to survive, to be able to pay my bills. There are a lot of elderly in my community who are doing the same. This is about to force a lot of people to sell their properties for pennies on the dollar because of a hotel industry-sponsored policy that ignores the middle class.

Brian Lehrer: Tony, thank you for your call. Greg?

Greg David: I don't know. I've written extensively about the problems of small landlords in New York, and I recognize that. By the way, the 60,000 figure is very inflated. We actually think the number could be as low as 13,000 units, the rent-stabilized units that are off the market. I think that is part of the problem we've got here is people are throwing lots of different things out. Like the private equity issue is very different than was characterized in that call, the 60,000 numbers way out of line with what the reality is.

Look, I understand that there are people who have two or three units and have been using them for Airbnbs and it's a big sacrifice for them. I think that's a clear problem that can be addressed, but clearly, Airbnb has removed thousands of units from the housing stock in New York in its full operation in the city.

Brian Lehrer: Greg, I want to thank you for your flexibility today. You came on to talk about your article in THE CITY about tourism, but we veered into migrationomics and we veered into the new Airbnb policy, and you did it all with a plumb and grace and a tremendous amount of expertise. As I know, you also reported on all of those things. Thank you very much.

Greg David: Thank you, Brian.

Brian Lehrer: Greg David reports on business and economics for the news organization THE CITY, and he directs the business and economics reporting program at the Newmark Graduate School of Journalism at CUNY.

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