The Real Deal New York

Key stat: Number of NYC hotel rooms on pace to break record

Says one developer: "We have not seen anything like today’s construction since the 1920s and early 1930s”

January 15, 2015 11:50AM

Renderings of the Knickerbocker Hotel at 6 Times Square

Renderings of the Knickerbocker Hotel at 6 Times Square

New hotel projects in New York City are booming, thanks to high occupancy and rising room rates. If current projects stay on track, the total number of rooms will top 110,000 by 2016 — an all-time high.

In the past seven years, the city has added 30,000 new rooms, pushing the current total to 102,000 rooms, the New York Post reported.

“We have not seen anything like today’s construction since the 1920s and early 1930s,” Cushman & Wakefield hotel broker Tom McConnell said.

The biggest potential threats to the boom are soaring inventory and the climbing value of the dollar, which could harm tourism.

“At the end of 2014, our occupancy was very high due to foreign tourism, but the dollar at a 13-year high is a question mark,” Harry Gross, a developer and the owner of two Manhattan Marriott hotels, said. He added that on certain days “we’ve had to reduce rates by 10 to 20 percent.”

Occupancy rates in the Times Square area are in the high 80s to low 90s, he said.

In February, the 330-room Knickerbocker Hotel will open in Times Square. Ian Schrager’s Edition Hotel at 5 Madison Avenue is also set to receive guests this year. [NYP]Tess Hofmann

 

  • 1Lionel

    The hotel industry is looking at the abyss thanks to foolish predictions by consultants like Hennessey and PKF intent on signing up more developers for consultancy fees regardless of the facts on the ground. Comparing occupancies to other cities is meaningless considering no other city has NYC’s real estate taxes, labor costs or general operating costs. Add to that the illegal hotel inventory of Airbnb, a high dollar and a potential interest rate hike in the 3rd quarter that will result in defaults for the first time in 6 years that will make the Trump Soho look like a walk in the park

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