Two Midtown hotels opt to reopen days after severance bill passes

Hilton, Grand Hyatt will bring back staff by Oct. 11, thus exempting themselves from new law

The Grand Hyatt on 42nd Street and the New York Hilton on Sixth Ave are both planning on reopening later this year (Hilton, Hyatt)
The Grand Hyatt on 42nd Street and the New York Hilton on Sixth Ave are both planning on reopening later this year (Hilton, Hyatt)

Two of Manhattan’s largest hotels are set to reopen in the coming weeks in a promising signal for New York City’s struggling hotel industry.

The New York Hilton Midtown will reopen Oct. 4, while the Grand Hyatt is set to welcome guests Nov. 1, Crain’s reported.

The news comes just days after the City Council passed a bill requiring hotels that either closed or laid off 75 percent of their staff during the pandemic to provide $500 per week in severance pay to service employees for up to 30 weeks.

Hotels can exempt themselves from the mandate by recalling at least 25 percent of workers by Oct. 11 and reopening by Nov. 1.

The Hotel Trades Council, which represents the city’s hospitality workers, told Crain’s that the 1,900-room Hilton will bring back about 325 of its roughly 1,100 employees — or approximately 30 percent — while the 1,300-room Hyatt will bring back at least 25% of its roughly 700 workers.

“Having struggled through months of unemployment due to Covid, it’s incredibly gratifying to see the passage of legislation we supported encourage major hotels to reopen and help get our members back to work,” Rick Maroko, president of the Hotel Trades Council, told Crain’s.

Hyatt confirmed the Nov. 1 reopening date to The Real Deal. In a statement, Area Vice President Peter Roth said the decision for the opening was “based on an increase in business demand and other factors, including recent legislative action by the New York City Council.”

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Diminished travel and tourism during the pandemic has devastated the city’s hotels. An April report from CBRE predicted that occupancy rates won’t recover to pre-pandemic levels until 2025.

As lockdown measures were rolled back amid broad vaccine distribution this spring, the industry saw some promising upticks in customers, but still paled in comparison to pre-pandemic rates, with revenue per available room down 62 percent in May compared to the same period in 2019.

The pandemic’s anemic rates were central to pushback against the hotel severance bill from the Real Estate Board of New York, which portrayed the legislation as an additional burden for hotel owners already facing difficult circumstances.

“These businesses, which may have not earned meaningful revenue for well over a year, may simply not be equipped to do so,” REBNY said in its testimony before the City Council.

Hilton did not respond to The Real Deal’s request for comment.

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[Crain’s] — Ellen Cranley