Tuesday, May 11, 2010

New York hotel industry gears up for tourist influx

(NEW YORK) It took nearly three months to find the perfect hue of slate blue for the bathroom towels at the InterContinental New York Times Square hotel.

The hotel's general manager, Drew Schlesinger, held each sample against the bathroom tiles to see how well the colours meshed. He dimmed the lights to see how that would alter the tones. He sent the towels back seven times to be re-dyed until they finally came up with the perfect shade.

'Details are extremely important,' he said, just before a walk-through of the hallways of the InterContinental, which is still under construction. 'You get enough people to have that 'Aha!' moment and it's a home run.'

It is gospel in the hospitality industry that the small stuff matters. The curve of the door knob, the heft of a closet hanger and a coffee mug that's just the right size can go a long way in convincing a hotel guest to become a regular customer.

This is particularly true in New York City, a place hotel experts call one of the world's most important markets because of its visibility and constant traffic from well-heeled business travellers and tourists alike.

The already-fierce competition is set to heat up even more as a new wave of hotels opens in New York this year, just as the lodging industry is recovering from what has been the worst slump for the sector since the Great Depression.

The number of new hotel rooms will increase 9.1 per cent in New York's five boroughs and neighbouring Rockland and Westchester counties, the most since at least 2002, according to PKF Consulting. In Manhattan alone, the number of new hotel rooms is expected to jump nearly 10 per cent, according to the Lodging Development Group, a research provider.

'That is a number of more rooms that need to be sold that didn't need to be sold last year or last month,' said Deutsche Bank analyst Chris Woronka.

Mr Woronka and other analysts said the increased supply this year is unlikely to hobble the recovery seen in the New York market because demand has been so strong, particularly among luxury hotels. For 2011 and 2012, experts are projecting a modest rise in room supply, which would help hotels raise room rates as the economy continues to strengthen. But hotels could struggle to prop up rates in the shoulder seasons of late spring and early fall, periods of typically weaker demand.

'The bigger question - is this lift in demand sustainable, or is it what some people refer to as 'pent-up' demand?' Mr Woronka said. 'New York is kind of the poster child for that answer.'

At 607 rooms, the InterContinental Times Square will be the largest to open this year. Other notable new properties include the luxury Trump SoHo New York hotel, which opened in April, and The Setai New York.

These properties are coming online at a time when major hotel operators such as Starwood Hotels & Resorts and Host Hotels & Resorts are reporting a greater consumer appetite for luxury offerings.

The definition of luxury, some hotel experts say, has shifted over the course of the last few years. Luxury at one point meant something ostentatious but the emphasis has now shifted to quality, said Ivanka Trump, executive vice-president of development and acquisitions for Trump Organization. 'Luxury should mean quality,' she said. 'Luxury stands the test of time.'

Ms Trump said she takes pages of notes when she stays at hotels around the world, delineating the touches she liked or did not. She pored over the details of the Trump SoHo, where each room has custom furniture from Fendi Casa and the bathrooms' walls of a steel gray Turkish marble.

Also slated for a late-2010 opening is the five-star Setai.

The hotel hybrid, which boasts it has no check-in or check-out time, is run by Capella Hotels & Resorts.

This year, New York City expects 46.7 million visitors, up 3.2 per cent from 2009, according to NYC & Co, New York's official tourism organisation. The group projects there will be 6,700 new hotel rooms this year.

In February, revenue per available room (revPAR) in New York rose for the first time since September 2008, buoyed by higher occupancy. In March, this metric rose nearly 17 per cent, outpacing revPAR in the United States by a wide margin.

'New York is always resilient,' Ms Trump said. 'There's a level of bounceback that other states haven't experienced yet.' - Reuters

Source: Business Times, 11 May 2010

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