Watching “The Ball” drop in New York’s Times Square on New Year’s Eve has become a television tradition for hundreds of millions of people around the world since its initial airing in 1956 and for visitors to One Times Square since 1907, the first year the famous sphere made its 11:59 p.m. descent.

New Year's Eve in Times Square

Each year about one million people flock to the center of Manhattan for the big event—which drops one ton of confetti on revelers—with even more travelers coming to New York City for other parties and festivities. This year NYC and Company, the city’s tourism and marketing arm, estimates 5 million visitors to the Big Apple in December, with the 31st being a night that always makes hoteliers quite happy.

“We can expect citywide hotel occupancies above 90 percent, with an estimated 82,000 or so room nights sold,” says Christopher C. Heywood, vice president, travel and tourism public relations, for NYC and Company.

The organization doesn’t track hotel revenues, but with an average daily rate of $270, and many of the top desired hotels commanding rates of $300 and more, it’s an important weekend for New York City tourism.

The standard multiplier of the economic impact of visitor spending in New York City is 50 cents for every dollar spent by a visitor, says Heywood. Add in restaurant meals, tickets for attractions, entertainment, transportation, and it’s easy to see why the city goes all out to make it special night for tourists.

For those who prefer to watch live, but from a warmer locale (this writer stood outside in the frigid cold her first New Year’s Eve in New York and vowed never to do it again), Times Square Alliance, which produces the annual event, recommends the following hotels and restaurants for having the best view of the ball drop:

Renaissance New York
DoubleTree Guest Suites
Marriott Marquis
TGI Fridays
Bubba Gump Shrimp Company
Sbarro Pizza
Olive Garden
R Lounge at Two Times Square

With New Year’s Eve taking place at the beginning of a weekend this year, businesses are hoping that visitors will stay an extra day until Sunday, instead of jetting home on January 1. It seems the weather is cooperating to make it an enticing stay: Temperatures are expected to be in the low 40s all weekend.

After last weekend’s snow dump, stranding travelers for days, that’s a great way to end 2010.

Photo courtesy: Times Square Alliance/Countdown Entertainment LLC