The Real Deal New York

Malkin blames Empire State Building’s tourism slump on weather, not 1 WTC

1.8 million people visited the tower’s observation deck in first half of year

July 30, 2015 10:20AM
By Konrad Putzier

Malkin ESB

From left: One World Trade Center, the Empire State Building and Anthony Malkin (credit: Max Dworkin)

The Empire State Building’s observation deck saw a decline in visitors in the first half of the year, but its landlord insists that has nothing to do with competition from the newly-opened observatory at One World Trade Center.

By June 30, 1.8 million visitors made it to the top of the landmark tower, down 4.7 percent from 1.9 million in the first half of 2014, Empire State Realty Trust revealed in a quarterly earnings call Thursday morning. Revenue from the observation deck was up by 0.7 percent in the recent quarter to $30.6 million, a slower growth than in previous quarters.

The company’s CEO Anthony Malkin argued attendance was down because of an unusually high number of bad-weather weekends and a slump in the number of international visitors to New York City. On the call, he had to field a barrage of questions from analysts on whether attendance was also impacted by the opening of the rival observation deck at One World Trade Center on May 29 – a notion he dismissed.

“On One World Trade Center, we continue to believe that the downtown day is different day from the Midtown day for a New York City tourist,” he said. The company did not reveal any detailed information on whether attendance has changed since the opening of One World Trade Center, but Malkin insisted he closely follows public attendance records at the rival observation deck and that the Empire State Building is outperforming it.

“Candidly, we think we’ll have a better idea of (One World Trade Center’s) impact on our performance by the end of this year,” he added.

Asked by an analyst if the real estate investment trust is considering selling the observation deck, Malkin responded: “I think you have to be absolutely insane to separate a business that has such an impact on your building from the ownership of the building.”

He said the company wants to stay in the observatory business because it’s not capital-intensive, and produces steady income independent of the office market.

“We like it,” Malkin said. “We like it a bunch.”