Light at end of tunnel coming to hotels

By Michael Stoler | May 19, 2009 05:45PM

After four months of weakness in hotel occupancy, the outlook is getting brighter for the local hospitality industry.  

According to Smith Travel Research, the U.S. hotel industry posted declines in the three key performance measurements during the week of April 26 to May 2, 2009.  

Year-over-year, the room occupancy rate fell 11.6 percent to 55.7 percent in the week ending May 2. The average daily room rate dropped 8.6 percent to $99.41, the data shows. The revenue per available room, or revpar, for the week decreased 19.1 percent to $55.53.

During the last week of April, six of the top 25 hotel markets reported double-digit decreases in the average daily room rate. The largest decrease was reported in New York City with a decline of 30.6 percent to $202.53 per night.

Nevertheless, in April, hotel occupancy levels in many of Manhattan’s hotels reached 80 to 90 percent at average daily room rates.

To boost business, hotels are continuing to offer special rates for this summer throughout the city, especially at newly renovated hotels.  

In June and July, two five-star hotels will reopen, offering guests an opportunity to spend nights at the city’s most elegant hotels at “early bird” rates.  

After a $100 million renovation, the 189-room Pierre Hotel, the iconic flagship of Taj Hotels Resorts and Palaces, is set to open June 1. The hotel will offer an early bird rate of $608 per night for a standard room. This price represents a 25 percent reduction in price, from the $816 per night advertised last month on the hotel’s Web site.  

Then there is the totally renovated Mark hotel located at 25 East 77th Street, which is slated to open July 20. The 118-room hotel — which also has 43 apartments — is offering a promotional rate of $425 per night. This price represents a significant reduction from the expected price of $1,000 per night, which was noted in an article that appeared in the New York Times in April 2008.   

Discounts can be found even at the famed Plaza Hotel, where the weekend summer rate for the 475-square-foot Plaza King room is $438 per evening, a 30 percent reduction from the standard room rate of $625 per evening.  

Michael Stoler is a columnist for The Real Deal and host of real estate programs “The Stoler Report” and “Building New York” on CUNY TV and on WEGTV in East Hampton. His radio show, “The Michael Stoler Real Estate Report,” airs on 1010 WINS on Saturdays and Sundays. Stoler is a director at Madison Realty Capital as well as an adjunct professor at NYU Real Estate Institute, and a former contributing editor and columnist for the New York Sun.