New York City Hotel Market Segments Alleviate Demand
- Aug 01, 2008
International travel to New York City, inspired by the weak dollar, has helped the market maintain its good health. That momentum, however, has not yet yielded much new development in demanding price points and parts of town.“There’s simply more demand in the New York hotel rooms than there has ever been, and there really hasn’t been an increase in supply to meet that increase in demand in the full-service and luxury sectors,” said Mark Gordon, head of the U.S. hotel group for Cushman and Wakefield Sonnenblick-Goldman L.L.C. Indeed, according to a PKF Consulting survey of 77 hotels encompassing 33,162 rooms, the most expensive room-rate bracket registered the largest occupancy increase—8.4 percent—from the first four months of 2007 to the same period in 2008.Geographically, Midtown West attracted the most additional guests. In fact, it was the only submarket in which occupancy grew, recording a 4.7 percentage-point increase to 84.5 percent.It seems those market segments are now jumping into action, though. Within the next four years, 10,000 to 15,000 midprice and luxury rooms are expected to add to Manhattan’s year-end 2007 total of 65,000 rooms, said PKF Consulting senior vice president John Fox. He reported that a number of projects are in the pipeline for the area between 23rd and 42nd streets west of Eighth Avenue, including 100 to 200 rooms of limited-service/midprice properties. A joint venture led by Stonebridge Realty Advisors Inc. recently announced plans to develop a $90M, 220-key select-service hotel on West 37th Street.