New York City’s tourists fuel record $4.9B in tax revenue

New York City’s tax revenue generated by tourists has surpassed pre-pandemic levels as a jump in US visitors helped offset a drop in international and business travel.

Last year 62.2 million people visited the Big Apple, state Comptroller Thomas DiNapoli said in a report released Thursday. While that’s down from 66.6 million in 2019, those tourists are expected to generate a record $4.9 billion in sales and other tourism-related tax revenue in the current fiscal year, a 16% jump from 2020 driven in part by rising prices for hotel rooms and other services.

The COVID-19 outbreak that began in early 2020 paralyzed the biggest U.S. city, killing thousands of residents, devastating the office and retail market, and spurring many to flee to the suburbs and other states. The city has been making a slow but steady economic recovery, with visitors returning to Broadway shows, museums and other destinations.

Tourism officials had hoped to surpass pre-pandemic levels this year, but a slower-than-expected return of international travelers forced them to push back the forecast to 2025, when the city is expecting to host 68 million visitors, DiNapoli said.

“The industry’s full recovery won’t be complete until we see a full return of international and business travelers,” DiNapoli said. “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.”

International visitors make up about 20% of the city’s annual visitors. In 2020, with travel restrictions affecting many countries, their numbers plunged 82.2% to 2.4 million, led by a drop in tourists from China, where the virus originated. That has since rebounded to 11.6 million last year but is still down 14.1% from before the pandemic.

Domestic travelers, on the other hand, have led the rebound. The 50.6 million U.S. visitors last year were 7% higher than in 2022.

Business travel, both domestic and international, has recovered more slowly than leisure, the report found. It fell to 400,000 in 2021 from 3.4 million in 2019, but has since risen to about 2.3 million.

In addition, the New York City tourism industry overall is still down 10.4%, or about 30,000 jobs, from before the pandemic, DiNapoli said.

Even with the slow recovery, New York remains the top U.S. tourist destination, with 33 million overnight visitors in 2023, ahead of Las Vegas (26 million) and Los Angeles (21 million).

Source: Mark Schoifet