New York’s trendy new hotels get cheaper, and far more expensive

A boomlet of new openings offers RM816-a-night entries just as exciting as the RM8,160 ones


IN OH-SO-PRICEY New York (NY), a one-night stay at a Courtyard by Marriott can cost north of US$1,000 (RM4,080) 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 US$500 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 US$200 a night or US$2,000.

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 US$1 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, the Whitby and Four Seasons Downtown, with its Calatrava station views.)

In short, NY’s hotel scene has long struggled to feel as innovative as the city around it. Not anymore.

Why Now

Two main factors are changing the economics — and thus, the offerings — of hotels in NY.

The soft real estate market, for one thing, has residential developers partnering with ultra-luxury hotel brands. Four Seasons’ CEO Alan Smith said at a travel industry conference in fall 2018 that his branded residences generate 30% 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% in NY, 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 NY, which will include 83 hotel rooms and 20 apartments — including a US$50 million penthouse — in the Crown Building on 57th Street and Fifth Avenue. When it opens late next year, its guests be paying upwards of US$2,000 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.

South-East 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 Bjarke Ingels, all with access to a 15,000-sq-ft (1,292.5 sq m) spa that includes a rooftop farm and “modern NY bathhouse”.

The Democratic Approach

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, meetings, or happy hour drinks. “So much space is wasted in a traditional hotel,” Hochberg explains: Maximising value from each sq ft is essential to maintaining his (and his guests’) bottom line.

Sharan Pasricha, CEO of hospitality development company Ennismore, shared that philosophy when opening NY’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.

Beyond the Promotional Rate

But what happens after the opening buzz dies down, or operational costs start trending upward?

When Ian Schrager opened the Public in the Lower East Side nearly two years ago, he called it his most “democratic” project to date, with US$150-per-night rates. Now, its rooms are consistently listed at US$375. At Sister City, where introductory rates started at US$99 just a few weeks ago, late-spring prices are already approaching the US$300 mark. And at Moxy Chelsea, US$159 starting rates are inching closer to US$400.

Citywide occupancy rates still exceed national averages by roughly 20 percentage points, says hotel consultant Hanson, with six million room occupancies in NY projected for this year alone. This means demand is high-and even “democratic” hoteliers can be tempted by the city’s favourable ratios of supply and demand.

Still, value is increasingly important to these hotels’ missions. A twist on the loyalty programme at Sister City encourages guests to sign up for free memberships and book directly with the hotel to get discounts, sidestepping costly commissions to big booking sites such as Expedia or Kayak. And at CitizenM’s new location on Bowery near the New Museum, modular construction was used to keep building costs — and therefore, room cost-low.

Hochberg says Moxy won’t work if he lets the prices balloon any further. “In a down market, people are going to gravitate to a more affordable product — that’s an easy one to predict. But we’re in a business of repeat customers, and our guests will only come back if they think they’re getting great value for their money.”

The Places to Know

NY’s latest entries, and how to choose between them.

CitizenM NY Bowery: Floor-to-ceiling windows add light and downtown views to the small but functional rooms, and clever conveniences include 24/7 food and beverage service. (Just in case you want to take the “city that never sleeps” thing literally.)

Equinox Hotel: Officially taking reservations now for its opening in June, it will have access to a 60,000-sq-ft gym with a 25-yard, indoor, saltwater pool. (And yes, there’s a SoulCycle just downstairs.)

Freehand Hotel NY: Book a suite to avoid feeling as if you’re sleeping in a gussied-up dorm room. Then set your alarm earlier than you need to: Breakfast here is one of the best in the city.

Hoxton Williamsburg: The rooms are “cozy” and the commute from Williamsburg, Brooklyn, can be brutal. Still, there are fondue dinners in heated geodesic domes throughout the winter and power outlets near sun loungers for outdoor co-working come summer. In other words, your colleagues will happily come to you.

Made Hotel: Lots of outdoor spaces (including the rooftop tiki bar, Good Behaviour) and a central (if slightly offbeat) location on West 29th Street make it an appealing midtown option.

Moxy Chelsea: The most successful outpost of this budding Marriott brand, it has an airy solarium behind the second-floor bar where you can plug in before happy hour, as well as modular co-working spaces designed by Rockwell Group.

Park Terrace Hotel: If you’d rather feel as if you’re staying in a luxury condo than a hotel, this new entry off Bryant Park will hit the spot.

Ritz-Carlton Central Park South: The classic property is about to wrap a top-to-bottom renovation; for luxury-seekers, its knockout park views and generously proportioned rooms will be a respite from the micro-hotel trend.

Sister City: The stripped-down website exemplifies the brand’s hyper-minimalist approach. It takes design cues from Japanese bento boxes and Finnish saunas, and uses connections to nature (lots of plants, real-time video projection of the sky) to feel like an urban escape.

A fireside lounge space on the lobby floor of times square Edition
(Pic: Bloomberg)

Times Square Edition: Ian Schrager’s latest project includes a handful of ambitious restaurants by John Fraser, a black-and-white-on-white colour scheme, and Blade Runner-style terraces that make Times Square look tiny. — Bloomberg