Trend of high-end airport hotels is taking off
Luxurious lodging offers good source of revenue to supplement car rentals, parking and food sales with a ‘significantly higher’ occupancy rate
On opening day of the TWA Hotel at Kennedy International Airport in May, visitors could be excused for any confusion.
Were they in the lobby of a new hotel in 2019, or had they stepped back in time to the bustle and glamour of the jet-setting 1960s?
On a balcony overlooking a sunken cocktail lounge in the building that once housed Trans World Airlines check-in counters and waiting areas, four young men were singing from the balcony.
Along a floor tiled in tiny, white disks walked pilots in crisp uniforms and flight attendants with carefully coifed hair.
Many places in the former TWA Terminal in New York, now on the National Register of Historic Places, were emblazoned with the red logo of an airline that ceased to exist nearly two decades ago but remains alive for many people.
Walking into the lobby on opening day, Peggie Sherwood saw the refurbished flight board and said, “It brought back so many wonderful memories.” Sherwood was a flight attendant for TWA for 29 years and called it the best job in the world.
In the courtyard between the hotel and Terminal 5, a restored 1958 Lockheed Constellation in full TWA livery has been turned into a cocktail lounge.
The nostalgia that
charms visitors disguises the fact that in adding a hotel this spring, Kennedy was more than a decade late in joining a trend well underway elsewhere. According to JLL, a hospitality consulting firm, 38 of the world’s 50 busiest airports have terminallocated hotels.
Frankfurt Airport in Germany has a Sheraton and a Hilton. Tokyo’s Narita and Haneda airports have two each, as does Dallas Fort Worth International. Kuala Lumpur International Airport in Malaysia has the luxury Sama-Sama and several budget hotels that serve low-cost carrier terminals. The same is true at Singapore’s Changi and Paris Charles de Gaulle, among others.
“Where you see multiple hotel offerings, it all has to do with segmentation,” said Gilda Perez-Alvarado, chief executive of JLL’s Americas Hotels & Hospitality Group.
“If you have the demand, it’s best to keep the guests at the airport because you have other businesses you want to feed,” Perez-Alvarado said.
By contrast, JFK has never had a hotel that air travelers could walk to.
Building a hotel behind Terminal 5 was a challenge for New York developer Tyler Morse of MCR Development because the two midrise buildings housing the guest rooms would bracket the architecturally significant TWA building designed by Eero Saarinen.
But once Morse got the go-ahead, he was all in, collecting TWA memorabilia and decorating the place in mid-20th-century style, right down to end tables topped with rotary-dial telephones.
Hotels on airport property in the United States and Europe have had more overnight guests and earned higher revenue per room than hotels in general, industry observers said.
An examination by STR, a hospitality and data benchmarking service, of four hotels at airports in the United States showed an occupancy rate of 84 percent in 2018.
“The average in those four airport-located hotels is significantly higher than the occupancy in all hotels around airports in the United States and the average hotel in the United States in general,” said Jan Freitag, senior vice president for lodging insights at STR.
This confirms the experience of Hyatt, which operates six airport hotels in the United States and South Korea.
“In-terminal hotels have the opportunity to outperform other hotels in the area, making them more favorable investments,” said David Tarr, Hyatt’s senior vice president, development, Americas.
For airports, hotels are a good source of revenue to supplement car rentals, parking and food and beverage sales, said Doug Yakel, a spokesman for San Francisco International Airport, which is opening a Grand Hyatt this fall.
“Having a more diverse set of nonaviation revenue streams helps protect airports from the historically cyclical nature of airline financial conditions,” Yakel said. An airport hotel “is good for the airport’s financial picture,” he said.
The Grand Hyatt at the San Francisco airport will have 351 rooms, three restaurants, a bar and 17,000 square feet of event space.
“A huge amount of regular travelers are interested in airports, and there’s a buzz in the community of people wanting to see the hotel,” said Henning Nopper, the hotel’s general manager.
That kind of talk appeals to Matt Falcus, a British aviation writer who runs the website www.airportspotting.com and in 2016 published the guidebook “Airport Spotting Hotels.”
His advice for those who want to see airplanes from their hotel is to ask for a guaranteed view. “The worst thing is to book a room and get a view of the courtyard,” he said. An exception is the TWA Hotel, where even the courtyard displays an airplane.