Manhattan's hotel market weak into 2010
February 25, 2010 11:00AM By Adam Pincus
Vijay Dandapani of Apple Core Hotels and Will Obeid of Gemini Real Estate Advisors at real estate panel yesterday
The bloodletting for Manhattan hotel operators did not end with 2009, preliminary figures covering January from industry analysis firm PKF Consulting reveal.
The average daily room rate fell in January by 8.8 percent compared with the same month last year to $192.96 per room, and the revenue per available room, or revpar, dipped by 3.6 percent to $125.71, data from PKF shows.
But on a bright note, the figures indicate that occupancy rates rose, to 65.1 percent last month from 61.6 percent in January 2009.
For all of 2009, revpar plunged by 25.8 percent from $264 per room to $196 per room, the PKF figures indicate.
At a panel on hospitality at the New York Real Estate Summit yesterday in Midtown, hotel executive Vijay Dandapani, president and COO of Apple Core Hotels, noted the year began poorly.
"We have seen a further depression in January," he said. "I personally think 2010 will be flat."
Speaking on the same panel, Will Obeid, president of hotel owner Gemini Real Estate Advisors, said the market should stabilize after April.
"We see 2010 flat over 2009. We do think the first quarter will be the bottom, and we are looking for some recovery toward the end of 2010," he said.
Click chart for larger version
Unrelated to the panel, new figures from one hotel owner and operator, Vornado Realty Trust, gave a rare glimpse into the impact of the weak 2009 market on a single property, its Hotel Pennsylvania at 401 Seventh Avenue at 33rd Street.
The New Jersey-based real estate investment trust showed in its 2009 fourth-quarter report dating back to 2005 released Tuesday that its revpar and occupancy rates in the 1,700-key hotel fell below their 2005 figures.
Its revpar dropped by 44 percent year-over-year to $95 per room in 2009, $1 below the rate in 2005, the Vornado figures show. The occupancy rate dropped to 71 percent last year from 84 percent in 2008, below the 2005 rate of 84 percent.
But the hotel's troubles may be a thing of the past if the REIT gets its way. Vornado pushed forward Feb. 8 to begin the approval process to demolish the 91-year-old hotel and replace it with what would be the third-tallest building in the city.
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Comments
Anonymous
oh but Trump Soho will succeed, right Donald? can you say foreclosure?
Comment #1 Posted By: Anonymous 02/25/10
Anonymous
But Stoller said things were getting better.
Comment #2 Posted By: Anonymous 02/25/10
Anonymous
I don't understand why they are lowering the rents. $50 is in different is not going to convince people one way or another about coming in to a hotel in NYC.
Comment #3 Posted By: Anonymous 02/25/10
Anonymous
haha, I love Comment #1.
Comment #4 Posted By: Anonymous 02/25/10
Anonymous
me too. Trump Soho is pretty much abandoned and dark. it's a big failure.
Comment #5 Posted By: Anonymous 02/25/10
Anonymous
what we need to do is increase the hotel occupancy tax - its like only 20% now..........we need more money to keep the mooching class in diapers, free healthcare, food, housing, you name it!! ----- Christine Quinn+ City Council
Comment #6 Posted By: Anonymous 02/25/10
Anonymous
Demolishing the Hotel Pennsylvania is a shameful thing. The shell could be saved and Vornado could build their useless offices inside. Landmarks do not replicate themselves and the Hotel Pennsylvania, in spite of its decrepit state, is still a McKim, Meade and White building.
Comment #7 Posted By: Anonymous 02/25/10
Anonymous
ok I just learned about 'revpar'. whats the industry term for 'overhead'. "revpar-overhead= the real picture". whats overheads running in nyc hotels?
Comment #8 Posted By: Anonymous 02/25/10
Anonymous
get stoler on the phone- he put out another pro hotel market article earlier this week. unbelievable.
Comment #9 Posted By: Anonymous 02/26/10
Anonymous
agreed #7 - why is the facade at least, not landmarked? tear down the crap one block north with all the fast food Vornado! Save the Hotel Pennsylvania - restore it to its former glory. Look at the bad Karma Macklowe got after destroying the beautiful irreplacable Drake hotel for an empty lot
Comment #10 Posted By: Anonymous 02/26/10
Anonymous
tear down Trump Soho and restore west soho its former classier days before Trump dumped on the neighborhood.
Comment #11 Posted By: Anonymous 02/26/10
Anonymous
Trump Soho is a death trap. A worker was already killed there last year.
Comment #12 Posted By: Anonymous 02/26/10
Mike
Almost every article in this magazine is strewn with horrible, gutless, venomous, jealous, loser Anonymous comments from people who don't have the balls to use their own name. Get a freakin' life!
Comment #13 Posted By: Mike 02/26/10