Yoga studios, skating rinks and other ways hotels are trying to grow revenue

New York /
Jul.July 05, 2012 01:30 PM

Still aching from the recession, cash-strapped luxury hotels are increasingly looking to non-room revenue sources, such as yoga studios, multi-purpose event spaces and even skating rinks, Bloomberg reported. In 2009 the revenue per available room rate slumped 24 percent at high-end hotels and now “revenue efficiency” — making sure that every square foot of real estate is profit-generating — is the latest trend in hospitality.

The Pennsylvania-based REIT Hersha Hospitality Trust is currently developing six hotels with revenue efficiency in mind. Six months ago Hersha agreed to purchase the Hyatt Union Square, currently under construction at 13th Street and Fourth Avenue, for $104.1 million, or approximately $595,000 a room. It is adding multi-use rooms and a rooftop lounge, which can be rented and converted for special events. It will also be meticulously selecting retail tenants based on area demographics.

Hersha is developing Washington, D.C.’s Capitol Hill Hotel and Philadelphia’s Rittenhouse Hotel with the same efficiency model in mind. As a result, Hersha has seen its non-room revenue grow to about 7 percent of total revenue, up from about 2 percent three years ago.

The Chicago-based REIT Strategic Hotels & Resorts has been even more aggressive in its attempts to maximize profits. It has gone so far as to flood the lawns of a couple of its hotels — turning the outdoor spaces into an ice rink during the winter months. That way, the hotels can charge for skate rentals and lure more diners to its food venues. It also leases walls inside and outside its hotels for advertising and rents unused space on rooftops to telecommunications companies. [Bloomberg]


Related Articles

arrow_forward_ios
The Watson Hotel at 440 West 57th Street (Google Maps)
Developers already eyeing commercial-to-resi conversions
Developers already eyeing commercial-to-resi conversions
Photo illustration of Brookfield Property Partners’ Brian Kingston (Brookfield, iStock)
Struggling hotel company handing Brookfield the keys
Struggling hotel company handing Brookfield the keys
Rendering of H Hotel, slated for 58 West 39th Street (Peter Poon Architects)
Heavy hangover: Air rights purchased for massive cantilever
Heavy hangover: Air rights purchased for massive cantilever
Watson Hotel at 440 West 57th Street (Google Maps)
Manhattan hotel trades in biggest distressed lodging deal of pandemic
Manhattan hotel trades in biggest distressed lodging deal of pandemic
Lightstone Group CEO Mitchell Hochberg and Marriott International CEO Anthony Capuano with a rendering of The Moxy Williamsburg (Getty, Lightstone, iStock)
Marriott, Lightstone Group bet on hotel recovery
Marriott, Lightstone Group bet on hotel recovery
(iStock/Illustration by Kevin Rebong for The Real Deal)
Travel roars back — and summer rentals book up
Travel roars back — and summer rentals book up
Bolivar Development's Peter Fine and 401 West 218 Street. (Google Maps)
10 biggest new project filings in NYC
10 biggest new project filings in NYC
Sonder CEO Francis Davidson. (Sonder, Google Maps)
Sonder to open in Flatiron Hotel next month
Sonder to open in Flatiron Hotel next month
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...