LOCATION REPORT MADE IN MANHATTAN F
or a city that never sleeps, New York sure has a lot of places where visitors can do just that. Manhattan’s hotel market moves
at the breakneck pace that pretty much everything else – with the exception of traffic and immigration queues – does in this dynamic city. Website
hotelchatter.com offers a light-hearted, gossip-driven look at the latest hotel news and is particularly up to speed on developments in the Big Apple, often dispatching photographers to get the first amateur shots of new openings. It is the scourge of PRs who promise over ambitious opening dates for new hotels, holding them to account when projects then suffer inevitable delays. In the intro to it’s ‘Master List of Hotel Openings 2012’
hotelchatter.com notes that this year’s list of New York hotel launches is shorter than last year’s, with just ten openings slated for 2012, compared to 16 in 2011(although some of these were ultimately delayed until 2012). Consultancy HVS offer a more scientific analysis of hotel development in their annual Manhattan Hotel Market Overview. In the introduction to its 2011 edition, President and Founder Steve Rushmore says that 62 new hotels opened in Manhattan between March 2008 and February 2011, but that this influx of hotels had minimal effect on the occupancy of existing properties. All this despite the industry facing what has been widely acknowledged as the biggest recession since the depression of the 1920s. “Manhattan boasts a diverse and expansive economic base; the area benefits not only from its standing as the world’s financial capital, but also from its status as a leading leisure destination. Such attributes translate into very strong lodging demand fundamentals for the area.” Compared to the recession of the early 1990s. where RevPAR collapsed below its 1987 levels for six consectuive years, this time around, despite the depth of the recession and the increase in supply, RevPAr has remained 10% above that of 1987. This, says HVS, highlights
“the inherent strength of the Manhattan lodging market.”
It is this strength which has emboldened
developers and investors to continue to add new hotel rooms to the city’s stock, regardless of the macro-economic climate. Supply is expected to increase by a further 8% between 2010 and 2013 – an estimate which only includes hotel projects that are under construction and have secured funding, not those that are in planning or subject to finance. Rushmore asserts that “future increases in supply are expected to be absorbed and thus are not anticipated to affect the recovery period.” These strong underlying fundamentals are bolstered by other factors such as Mayor Michael Bloomberg’s vision to attract 50 million visitors annually, a target it is on track to achieve. Some even argue that its cheaper to build a new hotel in New York than it is to buy an existing one. Arch hotelier Ian Schrager has been quoted as saying “As long as a newbuild is around $400,000 to $500,000 a key, you can build all day long in New York because it’s in line or below what you would pay for an existing building.” The diversity and quality of New York’s hotels are propelled forward by the strength of competition, in a market where indepedent boutique hotels battle it out with flagship properties from major hotel groups. New entrants such as Mexican hoteliers
Grupo Habita, and UK-based Yotel have touched down in New York. The city’s is soon to get it’s first “gay, straight-friendly” hotel – The Out in Hell’s Kitchen. Upscale brands such as Hyatt, and Conrad are about to join the fray in Union Square and Lower Manhattan respectively. Hyatt are on something of a roll, with Hyatt 48 Lex (August 2011) following Andaz hotels opened on Wall Street and 5th Avenue in 2010. Another property – a Park Hyatt designed by Christian de Portzamparc and Yabu Pushelberg – is slated to open close to Carnegie Hall in 2012. Meanwhile Marriott has put its money
040 MARCH / APRIL 2012
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where Ian Schrager’s mouth is, investing $165m in the purchase of Manhattan’s iconic Clock Tower building to develop an Edition hotel. Another significant opening due for completion in the next twelve months is NoMad hotel at 1170 Broadway. The property is currently being developed by Sydell Group, owners of the phenomenally successful Ace Hotels in New York and Palm Springs as well as the Saguaro in Scottsdale Arizona. They promise a Parisian-inspired lifestyle hotel that speaks to the building’s architectural heritage, with interiors by Jacques Garcia. André Balazs has taken over the Cooper Square hotel, for conversion to his Standard brand although the East Village property is expected to be more intimate and residential in feel than the high octane Standard in the Meatpacking district. Further afield, there are signs that some of Manhattan’s magic is beginning to rub off on the surrounding areas of New York City. Starwood has expanded its fast growing Aloft brand into Harlem and Brooklyn. King & Grove, a new hotel group by former executives of Morgans Hotel Group, has taken over the management of the infamous Hotel Chelsea and swooped on Brooklyn’s new Hotel Williamsburg shortly ahead of its launch. More intriguing still, the The Port Authority
of New York and New Jersey is currently looking at options to develop Eero Saarinen’s iconic 1962 TWA terminal at JFK Airport into a 150-guestroom hotel. Despite such activity, HVS concludes that “as the economic recovery continues, we anticipate that the additional new supply will be absorbed. Consequently the Manhattan lodging market is expected to remain undersupplied.”
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