New York’s hotel building boom is over: TRData
Permit application numbers for hospitality properties have fallen faster than for residential
The numbers don’t lie: The wave of new hotel construction in New York – which peaked in 2014 – is finally crashing as dozens of new hotels come online and developers shy away from planning new properties.
Hoteliers submitted permit applications for only six new hospitality properties – a total of 512 units – citywide in the first three months of 2016, accelerating a downward trend that began last year, according to The Real Deal‘s analysis of projects of at least 10 units filed with the Department of Buildings.
In 2015, developers planned a total of 4,630 hotel rooms, or about 1,158 per quarter. Those numbers, in turn, were down from their 2014 peak. That year, 9,012 new rooms were planned, or about 2,253 per quarter.
To some extent, that trend reflects a wider decline in permit filings citywide. Still, the decline in hotel filings has significantly outpaced that of filings for new residential units (see chart).
Those fast-declining totals may come as a relief to operators of existing hotels, many of whom have pointed to the city’s glut of hotel supply as one of the main factors – along with short-term rental services such as Airbnb – in the recent decline in nightly rates.
The average cost of a night’s stay in a New York hotel in 2015 came to $266, a 1.7 percent decline from the previous year, according to hospitality research firm STR.
Neighborhoods such as the Garment District and, especially, Long Island City have seen the most development this cycle. In LIC, developers filed plans for a total of 3,201 hotel rooms across 37 projects since 2010.
Of those, 23 are set to open by 2019, according to STR, including the 120-key Towne Place Suites Hotel and the 176-key Aloft Hotel.