NYC is a place where hotels cost A LOT, so it might indeed be a good use of points.
My recommendation to determine if it is worth it, take how many points it will take for your reservation and multiply by $12, then add the $99 exchange fee. I use $12 since that is what you can, on average, rent your points out for.
For example, say that the stay will cost you 100 points, that would be $1,200, subtract the exchange fee and it would be $1,299.
Now, will paying cash for a room cost more than $1,299? If so, then using points make the most sense, if not, then renting your points out and using the cash may make more sense.
Now, personally I would rather know if my cost is more than paying cash for the hotel, in our case, our points are worth about $5.00 per point, per year. So, in my case, the value would be $599 with the exchange fee for the comparison to 100 points.
The other thing to consider is to compare like rooms, unless you are willing to stay in a two star hotel while there, which most likely wouldn't have a kitchen or anything like that.
Also, don't forget to count things like parking fees, resort fee, wifi fees, etc. that your hotel might charge you when looking at price comparison.