Fall in hotel pipeline may help revive hospitality industry
With fewer hotel rooms under construction, hotel developers hope the reduction in new rooms will help to revive the hospitality industry.
The October 2009 STR/TWR/Dodge Construction Pipeline Report noted that the total active U.S. hotel development pipeline includes 4,089 projects comprising 435,265 rooms.
This represents a 32.7 percent decrease in the number of rooms in the total active pipeline — which includes projects in the construction, final planning and planning stages, but not in the pre planning stage — compared to October 2008.
“The number of rooms in construction fell 41.2 percent from the same time last year,” said Duane Vinson, vice president at STR. “Declines in final planning and planning are not as lofty at 30.3 percent and 28.9 percent, respectively. The number of rooms entering the ‘in construction’ phase will continue to decline as fewer projects receive financing and city approvals.”
A number of planned hotels have ground to a halt in Manhattan.
In October, Community Board 3 passed a resolution in support of the conversion of the stalled Lower East Side’s 180 Ludlow Street into a residential building. The developer Serge Hoyda has applied for a variance from the city’s Board of Standards and Appeals to transform the shell of the 19-story hotel into a rental building with 158 rent-stabilized units. Another hotel on the Lower East Side that may never come to fruition is the 63-room boutique hotel at 250 Bowery between Houston and Prince streets, developed by Peter Moore Associates.
Most of the planned “upper upscale” hotels in Manhattan have been put on hold or shelved.
In Midtown don’t expect to see the opening of the 140-room Shangri La Hotel at 610 Lexington Avenue at 53rd Street and the 150-room Orient Express Hotel at 24 West 53rd Street between Fifth and Sixth avenues. A number of new hotels will be opening near the New York Public Library next year including the 184-room Andaz Hyatt Fifth Avenue at 485 Fifth Avenue on the corner of 41st Street and a luxury hotel on top of a condominium at the corner of 38th Street and Fifth Avenue.
For some projects, construction has not even commenced, like at the 1 Hotel & Residence, the 162-room hotel at 14-20 West 40th Street across from the public library and Bryant Park. In Lower Manhattan, it will be a few years before the Four Seasons Hotel and Condos at 99 Church Street and Time Equities’ hotel at 50 West Street are expected to open.
As an aside, this afternoon, I am happy to announce the launch of the completely
revised “The Stoler Report” Web site, at www.stolerreport.com. The new Web site incorporates both shows, “The Stoler Report-Real Estate Trends,” now in its ninth season, and “Building New York,” in its fifth season.
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.