The Real Deal New York

ESB observatory drew more visitors – despite rival 1 WTC

CEO Anthony Malkin claims level of competition is “lower than expected”

July 28, 2016 11:26AM
By Konrad Putzier

From top: Empire State Building, One World Trade and Anthony Malkin

From top: Empire State Building, One World Trade and Anthony Malkin

UPDATED, July 28, 12:35 p.m.: The Empire State Building’s observation deck increased its revenues in the first half of 2016, despite a challenging tourism environment and competition from One World Trade Center.

The observatory generated $53 million in revenue during the six months ending on June 30 – up from $48.8 million a year earlier – the building’s owner Empire State Realty Trust TRData LogoTINY said in its quarterly earnings report. The number of visitors rose slightly to 1.843 million, from 1.787 million last year.

In an earnings call Wednesday morning, the real estate investment trust’s CEO said the competition from One World Trade Center’s new observation deck has been “lower than expected.”

“We are the first stop for tourists to view NYC,” he claimed.

A spokesperson for One World Observatory told The Real Deal: “By every measure, the Observatory is thriving. Revenue numbers are strong, and guest reviews speak to a uniquely positive experience by all who visit.”

The Port Authority of New York and New Jersey and the Durst Organization’s One World Trade Center opened its own observation deck in May 2015. The New York Times reported that it drew 2.3 million visitors in its first year – a million less than the 3.3 million annual visitors its operator, Legends, expected.

In the earnings call, Malkin acknowledged that the observatory is facing a challenging tourism market. The dollar’s value vis-à-vis key currencies rose over the past few months, which can hit international travel. The company said “favorable weather” helped push up attendance.

The observation deck is a major cash cow for the real estate company, accounting for almost 20 percent of its total revenues in the second quarter. Total revenues rose slightly to 165.8 million in the second quarter, from 164.8 million a year ago. Its net income fell to $24.6 million, from $26.6 million.

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