From the July issue: Before the economy collapsed last September, hotel developers rushed
to do deals in almost any Manhattan neighborhood, from the Financial
District to the Lower East Side to the far West Side, trying to cash in
on the surging demand for rooms.
Now, as the local market suffers a double squeeze of plunging occupancy
levels and thousands of additional rooms coming online, hoteliers and
developers are facing the brutal reality that neighborhoods still
matter a great deal in the Manhattan hotel business. It’s becoming
clearer by the moment that not all submarkets in Manhattan, which
contains 83 percent of the city’s hotel supply, were created equal.
“Many investors look at New York as an aggregate market … but I think
that’s misleading,” said Mark Gordon, executive vice president,
principal and head of the U.S. hotel group at Cushman & Wakefield
Sonnenblick Goldman. “When customers come to New York, the vast
majority of them want to stay in what I consider traditional locations.”