IN OH-SO-PRICEY New York, a one-night stay at a Courtyard by Marriott can cost north of USD1,000 during peak periods such as New Year’s Eve. If you’re seeking some semblance of smart design or luxury, good luck finding a halfway-decent room for under USD500 a night. But after years of pushback from developers dead-set on maximising per-room revenues, hoteliers are finding a new way to offer more bang for travellers’ bucks all across Manhattan – whether they’re looking to pay USD200 a night or USD2,000.
New brands such as Sister City, a spinoff of the hyper-successful Ace Hotels, and Equinox, with its fitness-first concept, are being incubated in Manhattan’s fastest-evolving corners, from the Lower East Side to Hudson Yards. Other upstarts are offering edgy design schemes and starter rates on par with Holiday Inns. Meanwhile, rarified brands Six Senses and Aman will soon push the city’s standards of luxury to even higher planes when they make their US and east coast debuts. The variety of these openings is alone noteworthy; their volume is practically unprecedented.
Getting there hasn’t been easy. You can thank land values and density-related zoning rules for that, says leading hotel consultant Bjorn Hanson. Developer Mitchell Hochberg, president of Lightstone Group, the force behind 165 hotels in the US, says those two barriers to entry have raised building costs in the city to USD1 million per room. The end result is expensive, bland, shiny boxes with a handful of notable outliers. (Among the ones we love are socialite havens the Mark and the Carlyle, and swish newcomers such as the Baccarat, theWhitby, and Four Seasons Downtown, with its Calatrava station views.)
In short, New York’s hotel scene has long struggled to feel as innovative as the city around it. Not anymore.
Two main factors are changing the economics – and thus, the offerings – of hotels in New York.
The soft real estate market, for one thing, has residential developers partnering with ultra-luxury hotel brands. Four Seasons’ chief executive Alan Smith said at a travel industry conference in fall 2018 that his branded residences generate 30 per cent premiums to competitive products in the market, a figure corroborated by London property-consulting company Savills Plc Hanson estimates that number as closer to 10 per cent in New York, but agrees that branded residences command top dollar in a red-hot market while incentivising sales in a slower one. For a bonus, multimillion-dollar condos greatly offset those hefty hotel development costs.
That’s the thinking behind Aman’s long-awaited entry to New York, which will include 83 hotel rooms and 20 apartments-including a USD50 million penthouse-in the Crown Building on 57th Street and Fifth Avenue. When it opens late next year, guests will be paying upwards of USD2,000 per night for an entry-level room (possibly a city record breaker). Aside from their Zen-inspired quarters they’ll have access to a members’ club and medi-spa stocked with a new line of Aman skincare products.
Southeast Asian resort brand Six Senses is also taking the residential-hybrid approach for its first American property, right off the High Line at 10th Avenue between 17th and 18th Streets. Opening Summer 2020, it’ll have 138 rooms in one of two branded residential towers designed by BjarkeIngels, all with access to a 15,000-square-foot spa that includes a rooftop farm and “modern New York bath house.”
Meanwhile, on the boutique hotel front, the second factor – the growing importance of common spaces (rather than rooms) to a hotel’s bottom line – has operators learning to do more with less.
Newer “micro-hotels” balance tight room layouts with high-design standards and larger, more enticing common spaces. It started with Arlo Hotels – a brand that debuted in Hudson Square in 2016 and will have three Manhattan outposts when its midtown location opens next year-and was followed by Moxy, Freehand, CitizenM, and Ace Hotels offshoot Sister City, all in the past year.
“People don’t tend to hang out in their rooms, anyway,” says Lightstone Group’s Hochberg, who developed the newly opened Moxy Chelsea. Instead, they hang out at Feroce, an all-day, street-level restaurant run by Tao Group; they can also head upstairs to a modular lounge space whose furniture is designed to collapse or expand, so that guests can use it for co-working or meetings.
“So much space is wasted in a traditional hotel,” Hochberg explains: Maximizing value from each square foot is essential to maintaining his (and his guests’) bottom line.
SharanPasricha, chief executive officer of hospitality development company Ennismore, shared that philosophy when opening New York’s first outpost of beloved London brand Hoxton in Brooklyn in fall 2018.
“Today, you can extract value by monetising every bit of space. Rooftops have become revenue-generating. Ground floors have become community melting pots.
:Bakeries, flower stores, coffee shops-they’re all revenue-generating toys, as we call them,” he explains. Give people all those venues to play and spend money in, and you can maximise profit with smaller rooms and lower prices. – Photo and text by The Washington Post