Newsletter Vol 4: New York City is a Hotbed of Hotel Development
Almost everywhere you look in the Big Apple - from the greatly-anticipated Hudson Yards mini-city within the city on the far west side of Manhattan to the historic NoMad neighborhood and bustling financial district both in Manhattan to the revitalized Long Island City section of Queens, there are gleaming new hotels being built.
In fact, supply growth for next year is anticipated at 6.4 percent, or 5,666 new rooms, compared with 3.6 percent, or 4,194 rooms, for this year, predicted Mark Stekelenburg, managing director of CBRE Hotels Advisory, who leads the company's Northeast and Mid-Atlantic practices and is based in New York City. CBRE is tracking 63 hotels with 11,200 rooms that are expected to open in the next six to 24 months. There are currently 117,000 hotel rooms in the five boroughs; that number will rise to 137,000 by the end of next year alone, added Christopher Heywood, senior vice president of global communications at NYC & Co., the city's destination marketing organization.
So, the big question is: Can the city absorb all this new supply that will be coming in the market, especially in the next year?
"Tourism to the city is at an all-time high; the market should be able to absorb new hotels," said Vijay Dandapani, president and chief executive officer of the Hotel Association of New York City.
One of the biggest projects in New York City now is the Hudson Yards re-development mixed-use project, which is creating a new neighborhood on Manhattan's far west side near the Jacob K. Javits Convention Center that will include hotels, retail, restaurants, residences, and office space in 2019. The project includes three skyscrapers with nearly 6 million square feet of space, 4,000 new residences, hotels, and more than 100 stores and specialty shops.
"We are seeing new submarkets being developed, like Hudson Yards, which didn't exist in the past," Dandapani added.
There also are new markets like Long Island City, which a handful of new hotels within the next year, that handles overflow from Manhattan and is so desirable because it is just minutes away from Manhattan by subway, Mark Stekelenburg noted.
Endeavor Hospitality Group LLC, a New York City-based hotel developer, will be building three properties in the Big Apple, said Tom Xavier, chief executive officer. The first hotel will be a 399-room Courtyard by Marriott that will open in Hudson Yards this December. The company has a second property that will open in the area, with 400 rooms, in 2021. Xavier said it will be one of the Marriott-branded hotels; he just isn't sure which brand yet. And, Endeavor is also opening a 130-room AC Hotel near LaGuardia Airport in Queens in 2020.
"There is just so much demand, and the Javits Center expansion will continue to bring demand to that area," Xavier said.
Heywood agreed, saying that hotel demand is still outpacing inventory. "We have continuous new demand generators, such as lower Manhattan becoming a 24/7 visitor destination, lifestyle hotels that are offering a new experience in travel, and next year's official opening of Hudson Yards," The growth is explosive and sustainable."