Wave of NYC hotel openings see operators trying new tactics to boost business

Hotel operators are partnering with luxury condo developers & exploring “micro” options to lower prices

New York /
Mar.March 29, 2019 09:31 AM

The Crown Building at 730 5th Avenue and a “Cosy” small room at the Hoxton at 97 Wythe Avenue in Williamsburg (Credit: Aman and Hoxton)

There are an unprecedented number of new hotel projects opening in New York City. And operators are exploring news ways to lower prices — and raise them.

Two major trends have emerged among these new hotel offerings, according to Bloomberg.

Firstly, a slowing market has encouraged residential developers to work with luxury hotel brands. For hotels, the sale of expensive condos in the building can offset development costs.

That’s the case at the Crown Building at 730 5th Avenue, where luxury hotel company Aman Resorts is making its New York debut with 83 hotel rooms and 20 condominiums. An Aman-branded penthouse in the building went into contract for $180 million last year, The Real Deal previously reported. The cheapest rooms at the Aman hotel are expected to go for around $2,000 a night, according to Bloomberg. Vlad Doronin is developing the residential component of the historic property.

Secondly, more operators are exploring “micro-hotels,” with small, cheaper rooms but larger common spaces.

“Today, you can extract value by monetizing every bit of space,” Sharan Pasricha, chief executive officer of Ennismore, which opened the Hoxton in Williamsburg in 2018, told Bloomberg, “Rooftops have become revenue-generating. Ground floors have become community melting pots. Bakeries, flower stores, coffee shops—they’re all revenue-generating toys, as we call them.”

However, micro-hotels in the city have struggled to maintain the low rates they offered at opening. At the newly-opened Moxy Chelsea starting rates hovered around $159 a night but have now risen to around $400. Sister City, an offshoot of Ace Hotels, opened on the Lower East Side early this year with promotional rates of $99, but are now charging around $300. [Bloomberg] – Decca Muldowney

 

Related Articles

arrow_forward_ios
258 8th Avenue (Google, Target)

Target planning yet another NYC store in Chelsea

Target planning yet another NYC store in Chelsea
Churchill Real Estate's Justin Ehrlich and 381 Broadway (Google Maps)

Two-year Tribeca foreclosure saga continues with lawsuit over $20M

Two-year Tribeca foreclosure saga continues with lawsuit over $20M
Adam America's Omri Sachs and Dvir Cohen with 2503-2509 Broadway (Google Maps; Adam America)

Adam America secures $63M in financing for Upper West Side project

Adam America secures $63M in financing for Upper West Side project
Convene CEO Ryan Simonetti (Convene)

Convene closes Manhattan locations as corporate events fail to return

Convene closes Manhattan locations as corporate events fail to return
New York City District Council of Carpenters’s Monitor Glen McGorty (iStock; LinkedIn)

NYC carpenters union changes how it roots out mob ties

NYC carpenters union changes how it roots out mob ties
The Economic Innovation Group identified 145 real estate investments in Opportunity Zones (iStock)

Real estate deals dominate Opportunity Zones. Is that bad?

Real estate deals dominate Opportunity Zones. Is that bad?
11 Penn Plaza and Apple CEO Tim Cook (VNO; Getty)

Apple snags more space at Vornado’s 11 Penn Plaza

Apple snags more space at Vornado’s 11 Penn Plaza
Amazon's Jeff Bezos, Google's Sundar Pichai and Facebook's Mark Zuckerberg (Getty, iStock)

Tech giants occupy nearly 600M-sf of US real estate

Tech giants occupy nearly 600M-sf of US real estate
arrow_forward_ios

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

Loading...