Heading beyond Manhattan for the night

If you’re looking for a hotel above 34th Street in Manhattan, the odds are with you: 71 percent of New York City’s supply of rooms is there. When you decide to actually book, however, things get a bit more complicated.

In the last year, Manhattan hotels had an average rate of 85 percent occupancy. According to Tripp Riggs, a senior associate at PricewaterhouseCoopers, which tracks the industry, that essentially means there were only hotel rooms available on Sunday nights.

“Most hotels are turning away 70 to 100 guests a night,” said Jeff Dauray, a senior vice president at brokerage CB Richard Ellis. Those who are turned away, he said, “stay in the boroughs.”

Building in the outer boroughs

While New York City’s outer boroughs currently have only 13 percent of the hotel rooms in the city, they have seen 25 percent of the growth in recent years, according to PricewaterhouseCoopers.

Brooklyn and Queens in particular are riding a wave of hotel construction that began in Manhattan.

After Sept. 11, financing for hotels shut down out of uncertainty as to how the tourist industry in New York would fare, Dauray said. When tourism bounced back, the financing was behind the curve, so the current surge in hotel construction is belatedly responding to the growing need. While a number of hotels are being built in Manhattan, especially Downtown, space is tight, and the less-pricey outer boroughs are looking more and more attractive to developers.

The boroughs are not simply building more hotels to hold spillover Manhattan tourists, however.

Even before Brooklyn set out on its recent path of gentrification and revitalization, “Brooklyn was extremely under-hoteled,” said Brad Lander, director of the Pratt Center for Community and Environmental Development. Given the borough’s new growth, building more hotels in Brooklyn is an idea whose time has come.

Boutiques in Brooklyn

New project Hotel le Bleu — the kind of boutique hotel development previously exclusive to Manhattan — is going up on Fourth Avenue in Park Slope.

“People coming to visit are reflecting the consumer preferences of the people they’re coming to visit,” Lander explained. In other words, if your friends live in increasingly haute bourgeois Park Slope, you’re probably selective enough to want to stay in a boutique hotel nearby.

Domenick Tonacchio, president of Tona Development, which is developing Hotel le Bleu, explained that when he saw the trendy restaurants on Fifth Avenue and the residential development on Fourth, he knew he had to build a hotel for the neighborhood’s new clientele.

“When these people’s relatives come, not everyone has space for friends and relatives, and not everyone wants to stay in a Best Western,” Tonacchio said.

The hotel at 370 Fourth Avenue is set to open by March 2007, with 48 rooms that will each be around 350 square feet. Prices will range from the high $200s to the low $300s a night, and the hotel will possibly house a restaurant.

Hotel le Bleu is the first boutique hotel in the borough that Tonacchio is aware of, but it is certainly not without competition.

The Smith, at 75 Smith Street, will offer a combination of hotel rooms and luxury condominiums when it opens by summer or fall 2007. The 93-room hotel is being designed as a three-star hotel; the building is still selling condo units.

As these two projects attest, even if you don’t know anyone who lives in Brooklyn, Lander says that the borough has become “a place that’s familiar, comfortable.” It’s a place many tourists or businessmen might choose, rather than simply settle for.

Most hotels are chains

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The boroughs may be becoming more of a destination, but for the most part the hotels being built are part of national chains. That’s because the hotels there still need a national brand name to help attract customers. Like most hotels, they rely on the chain to fill 20 to 30 percent of their reservations, according to Dauray.

The Marriott in downtown Brooklyn at 333 Adams Street, formerly the only hotel with strong name recognition in the borough, just added over 280 rooms that opened in September; it now has 628 rooms. Prices for a double on a Friday night last month ranged from the high $200s to the low $300s.

There are more hotels in the pipeline for downtown Brooklyn, reportedly including a 400-room Sheraton on Duffield Street.

Not all the hotels going in are high end. Prolific hotel developer Sam Chang, president of McSam Hotel Group, is working on more than a half-dozen projects in the borough (see Checking in with Sam Chang) and just put in a Holiday Inn Express at 625 Union Street, located across the street from an auto body shop. Prices for the 115-room hotel range from $139 to $239 for a double, depending on the season. On Butler Street, Chang is also building a 106-room Comfort Inn in an industrial zone behind the Gowanus Houses public housing development.

Other projects in the borough include a Best Western that recently opened in Sheepshead Bay, and hotels planned for Bay Ridge, Red Hook and Sunset Park.

The Bronx, Queens and Staten Island

While many industry insiders have focused on Brooklyn, Eric Lewis, industry leader of the hospitality and gaming group at Cushman & Wakefield, has seen significant movement elsewhere.

Projects like the development of the Bronx Terminal Market and Yankee Stadium are driving hotel construction in the Bronx and the ever-increasing tourist industry is fueling hotel growth at the airports in Queens.

By the time the new Yankee stadium opens in 2009, the Bronx may get a 250-room hotel and convention center. Meanwhile, Chang is planning to construct a five-story, 80-room Comfort Inn Motel at 3070 Webster Avenue between 202nd and 203rd streets. He purchased the former 5,500-square-foot warehouse last year for $550,000, according to reports.

On Staten Island, there are only around 600 hotel rooms in eight hotels and motels, according to Smith Travel Research. The data firm found the daily occupancy rate for Staten Island was 63.1 percent for the first eight months of the year, up 4 percent from the year before.

The average hotel room in the borough costs $109 a night.

Chang plans to build two hotels in Travis, on a site located between a shuttered movie theater and the edge of the former Fresh Kills landfill, according to a story in the Staten Island Advance. His company last month filed an application to build a five-story, 90-room Holiday Inn Express, and he told the paper he has plans for another hotel there.

He was quoted as saying that most cities the size of Staten Island — around 500,000 people — have at least 2,500 hotel rooms, while Staten Island has only around a quarter of that number.

Lewis noted that tax breaks for developers who build in the outer boroughs are responsible for a lot of the growth. The incentives are often “the difference between feasible and not feasible,” Lewis said.

To a certain extent, hotels in all of these neighborhoods face the challenge of convincing guests that they’re not missing out on anything.

For Stephen Peca, the managing director at Concourse Realty Group, that means building full-service hotels, because with the exception of some neighborhoods in Brooklyn, restaurant options may be limited.

Even in Hoboken, the site of much development and a soon-to-be W Hotel, Peca said restaurants are a problem. “Their eating district is three to four blocks away and that may turn people away,” he said.

Lewis of Cushman & Wakefield, however, said most of these projects would likely be limited-service hotels, without amenities like a restaurant. For them, location is important, which is why so many are gravitating to Boerum Hill, Carroll Gardens and Park Slope in Brooklyn, where restaurants and cafeacute;s abound.

Lewis stressed that limited-service hotels are significantly less expensive and need less space, and so they are more feasible.

And, after all, offering a less expensive hotel was where the trend began.

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