January 23rd, 2002, 12:32 PM
From New York Times
January 20, 2002
Despite Worst U.S. Vacancies in 30 Years: Flat Year Seen For Hotels Here
The hotel occupancy rate in New York City fell 10.6 percentage points last year, averaging 73.3 percent, and is expected to remain near that level this year, according to a study by PricewaterhouseCoopers, the accounting and consulting firm.
Hotel operators have been cutting prices to attract customers, so the average daily price in New York City fell to $191.70 in 2001 compared with $222.37 in 2000. Any increase in occupancy this year will probably come at the expense of prices, officials of the firm said.
Nationwide, according to the study, hotel occupancy is expected to decline again this year, falling to the lowest level since 1971. Last year the nationwide average occupancy rate fell to 60.3 percent from 63.7 percent in 2000. This year the firm expects the decline to continue to an average occupancy rate of 59.6 percent, the lowest level in more than three decades.
According to the national forecast, no segment of the hotel industry will grow in occupancy until 2003, when an increase in demand and only a 0.8 percent growth in the supply of hotel rooms is expected to push the occupancy rate up to an average of 60.8 percent.
The firm said the leading factors weighing on occupancy rates were a decline in travel caused by the recession, the increasing inconvenience of air travel, the increased possibility of airline delays and fears over the safety of traveling.
January 28th, 2002, 02:47 PM
$191 is still expensive. And I guess that figure doesn't include the local tax.
January 28th, 2002, 03:03 PM
On a bright side, it's 15% drop in prices, and it's an average. Cheap hotels around Times Square are $100/night.
March 21st, 2005, 11:43 AM
Hotel Capacity Soars in New York, as Downtown Surges
BY JULIE SATOW
March 21, 2005
The number of hotel rooms in Manhattan has swelled by 5,000 in the past five years and is expected to grow by another 1,500 in the next year.
The growth contradicts some press reports and union claims that have depicted a dwindling hotel room inventory that could leave the city's booming tourism industry stranded.
According to the recently released Manhattan lodging report from the consulting company PricewaterhouseCoopers, 1,479 net new hotel rooms will be created by year-end 2006 and 2,728 net new hotel rooms are to open in the near future, mostly by year-end 2007.
"Net-net, over the next several years years, as the West Side opens up and downtown comes back, I guarantee there are going to be more hotel rooms than there are today," the chief executive officer of Jones Lang LaSalle Hotels, Arthur Adler, said.
"There is a growing supply of hotel rooms, the data speaks for itself," Bjorn Hanson, who authored the PricewaterhouseCoopers report, told The New York Sun. He said the bulk of the hotels that are in the planning stages now should be complete by 2007.
With a red-hot residential market, a number of hotels in prime neighborhoods have been converted into apartments. Countering that trend, however, is a booming hotel market that has seen a number of boutique hotels cropping up in neighborhoods such as TriBeCa, Harlem, and the Lower East Side, where hotels were scarce, experts say. There are also some larger hotels on the horizon, including the 1,500-room hotel scheduled to open at the expanded Jacob K. Javits Center on the West Side.
A residential premium is driving the conversion trend. Of the 17 hotels sold last year, seven were converted for residential use, including the Empire Hotel, the InterContinental Central Park South, and the Mayflower Hotel.
While the average sale price of a hotel is less than $1,000 a square foot, the sale price for a luxury apartment in the fourth quarter of 2004 was $1,364, according to data released by Douglas Elliman.
While these hotels are being converted, the flip side is the development of new hotels.
"The combination of the strengthening economy, weak U.S. dollar, and the reduction in the number of hotel rooms has made New York attractive to many hotel developers," Mr. Hanson said. Because residential developers are snatching up many of the larger, expensive properties, hoteliers are looking at alternative areas. Boutique hotels that have developed a trendy following after their openings last year include the Hotel Gansevoort in the Meatpacking District and Andre Balazs's hip backpacker's hostel, the QT. Soon to follow is the first kosher boutique hotel with a jazz lounge and whirlpool tubs, the Blue Moon Hotel at 100 Orchard St., scheduled for a May opening.
Brooklyn is also seeing growth, with work under way on a 280-room expansion of the Brooklyn Marriott hotel that opened in Downtown Brooklyn in 1998, and what has been described as a luxury boutique hotel expected to open this year on Clark Street in Brooklyn Heights.
"New York is also seeing a small number of limited service hotels that offer a high value for visitors who don't need all the amenities such as a large lobby and concierge services," Mr. Hanson said. These include hotels such as the Four Points Soho Village and the Courtyard by Marriott hotel, which are both opening in January.
The new crop of hotels is a far cry from the large luxury hotels they are mostly replacing, such as the Plaza and the InterContinental Central Park South. These hotels employed an average of 150 workers for 100 rooms, while the boutiques usually maintain 50 to 75 employees for 100 rooms. The limited-service hotels have only 35 to 50 employees for 100 rooms, according to Mr. Hanson.
So despite an increase of net hotel rooms, there could still be a job loss for hotel workers, Mr. Hanson said. "The luxury hotels that are closing have, on average, 1.5 workers for every room, and the hotels that are opening have, on average, .75 employees per room, so the number of jobs created are greatly surpassed by the number of jobs being lost."
A labor organization that represents hotel workers, the New York Hotel Trades Council, has argued that it is steadily losing jobs because of the shrinking number of hotels in New York. A spokesman for the union, John Turchiano, said it has lost 1,076 jobs in 2004, largely because of hotel conversions to residential buildings. A recent New York Times article about the conversions was headlined "If They Come, Where Will They Sleep?" and claimed "the industry is shrinking."
"Gee, what happened to the 5A Clarion, the Melrose, the Gramercy Park, the Delmonico, the Helmsley, and the Windsor, all of which were sold for the purposes of condominium conversions, not to mention the St. Regis, which converted two full floors to condominiums?" a union spokesman, John Turchiano, said, listing hotels not mentioned in the PricewaterhouseCoopers report. "I think Mark Twain was right. There are lies, damned lies, and statistics."
The president of the Hotel Association of New York City, Joseph Spinnato, said he was not surprised by data showing an increasing number of hotel rooms in the coming years.
"We have heard from various developers and companies that there are hotels in the works," said Mr. Spinnato, whose group represents 200 hotels. "It is just the market, which dictates that if hotel rooms are lost new rooms must come on board."
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