Hotels see room boom
Big growth coming to big cities,
This year is shaping up to be a healthy one for the U.S. hotel industry, with more 33,000 new rooms planned in the top 10 most active markets.
According to industry research firm Lodging Econometrics, the top market by far is New York City, with an estimated 8,612 new rooms in the pipeline for 2017.
“The rooms opening in these markets will be the first wave of new hotel supply in a healthy hotel market for owners,” says Bruce Ford, senior vice president of development at Lodging Econometrics.
CBRE Hotels’ America’s Research, which tracks the industry, also puts New York City at the top of the market with a 6.4% increase over last year, the largest increase of any region.
Both firms named these other cities among the most active markets in the USA: Houston, Dallas, Chicago, and Los Angeles.
Lodging Econometrics also pointed to Charlotte, Denver, Seattle, Austin, and Tampa as healthy places for hotel development.
CBRE is also seeing a notable percentage growth in room supply in Washington, D.C., Orlando, Atlanta, Phoenix, and San Diego. The U.S. average percentage growth in supply is estimated at 1.8%, according to CBRE.
New York City will see a big increase in a category called select- service hotels. These properties typically offer similar in-room amenities to full-service hotels but have fewer meeting spaces and restaurants. They are popular with hotel owners because they are cheaper to build and run, and they are popular with travelers because they are more reasonably priced yet still offer amenities.
“This is an urban center trend that is spreading throughout the world,” Ford says.
Fred Dixon, president and CEO of NYC & Company, the official destination marketing organization, says the city is on track to receive a record 60.3 million visitors in 2016.
“For hotels, it has meant a steady increase in hotel room nights sold—the key metric of demand—among our 111,000 rooms, which has also supported ongoing investments in new developments,” he says.
Among some notable Manhattan projects are: a 315-room CitizenM Hotel in Lower Manhattan, a 14-room Restoration Hardware Hotel by the furniture store in the Meatpacking District, and the 190-room SLS Hotel New York designed by Philippe Starck. It will be a busy year for SLS, as it is also slated to open this summer in Seattle with 184 rooms and views of Elliott Bay.
Boutique hotel guru Ian Schrager will open the 370-room Public in the Lower East Side. In collaboration with Marriott International, he will also debut his second EDITION hotel in New York, a 450-room property in midtown.
Marriott will bring to Manhattan one of its newest brands, the 266-room AC Hotel by Marriott, in the Financial District. Marriott will also introduce its Moxy brand to New York City with a 614-room property near Pennsylvania Station.
Manhattan is not the only borough getting new hotels. A wave of activity is happening in Brooklyn, with the second eco-friendly 1 Hotel in the city coming to Brooklyn Bridge Park. The Pod Hotel Brooklyn will open in Williamsburg.
Queens is getting a 108-room Hyatt Place in Long Island City. And Aloft will open at New York LaGuardia Airport. The Bronx will get a 62-room Holiday Inn Express.
Late in the year, Staten Island will have a new 190-room hotel that has yet to be named. The north shore of Staten Island will soon have the New York Wheel, which is projected to be the world’s tallest Ferris Wheel, plus a shopping mall and residences.
“In 2017, we are seeing new properties and new locations developing across new neighborhoods in every borough at every price point,” Dixon says.
The largest hotel opening in 2017 is projected to be the 1,200room Marriott Marquis at McCormick Place in Chicago.
According to CBRE, Chicago is slated to get 2,142 new rooms this year.
In addition to the Marriott Marquis, Chicago will get a new trendy ACE Hotel in the Fulton Market District, a luxury Viceroy hotel in the Gold Coast, and a Nobu Hotel, co-owned by actor Robert De Niro.
The city will also welcome EMC2, part of the Marriott Autograph Collection. Kimpton Hotels and Restaurants’ former Hotel Burnham will be rebranded to The Alise Chicago, a StayPineapple Hotel.
Los Angeles has some notable openings as well, many with rooftop pools or bars. Downtown L.A. has in recent years become a hot spot for new hotels to accommodate convention activity and events at L.A. LIVE and the Staples Center.
New York’s popular NoMad Hotel will spread to Downtown L.A.’s Giannini Place, which was built in 1923 as the headquarters for Bank of Italy. It will have 250 rooms. Elsewhere in the city, celebrity chef Nobu Matsuhisa is taking over the old Casa Malibu and converting it into a ryokan, or a traditional Japanese inn. The beachfront property, owned by tech magnate Larry Ellison, will have 18 rooms.
Los Angeles will welcome its first Waldorf Astoria. The Dream Hotels boutique-luxury brand will introduce a new hotel in Hollywood’s “Cahuenga Corridor” with 179 rooms.