Positive prospects draw US$4.2 billion to New York hotel development

Pictured: Plaza Athénée Hotel, New York.
The stars are aligning in New York City to once again make the US metropolis a magnet for hotel development, with THP reporting over US$4.2 billion already in the upper segment pipeline.

As at least 42 projects are underway encompassing 9,545 keys, according to our database, hoteliers are preparing for the Big Apple to set new records in attracting visitors.

Tailwind convergence

A variety of factors are proving to create a fertile environment for future hotel additions. But as New York was one of the hardest hit US markets during the pandemic, considering its status as a centre of commerce as well as a tourism hub, many industry analysts were predicting that it wouldn’t recover until 2024.

However, the Wall Street Journal detailed that the rebound has already begun, outlining that a total of 63.3 million leisure and business travellers are expected to stay in the city by the end of the year, nearing 2019’s peak of 66.6 million. That record amount is projected to be surpassed next year. Plus, according to City Guide NY, global airline passenger travel to the Big Apple is now 95.7% of pre-pandemic levels.

Short term rental restrictions

Furthermore, the New York City government has sought to slow the charge of Airbnb, passing Local Law 18 last January to mandate that short-term rental hosts apply for registration through a council portal. Since the regulation went into effect in September, the metropolis’ Office of Special Enforcement has approved just 405 of the 4,624 applications it received.

This stringency may shift demand back to hotels, with aparthotels anticipated to be the beneficiaries of any like-for-like boost. Combined with many hotel sites ceasing operation during the pandemic, there looks to be plenty of opportunities to create new accommodation concepts.

Upscale ascendency

The city’s current high end hotel pipeline shows a preference towards the upscale sector rather than luxury lodging, according to THP records. That equates to at least 25 four star projects as against 17 five stars – a 60/40% split.

Considering New York’s densely packed topography, developers are still finding space for construction, with 60% of upcoming high end hotels being newbuilds, that’s a minimum of 25 sites. Just five properties are conversions, with 12 refurbishments also underway.

Steady stream

Opening dates for these hotel developments will form a steady stream of additions, with seven projects still to deliver this year, and 2024 due to welcome at least 15 upper segment sites. Six will follow in 2025, and another two are slated for 2026, with the remaining 12 either arriving further in the future or have yet to be designated a delivery date.

Project phase counts are relatively even too, with 11 in planning, six in pre-planning and one in a vision stage, as against 17 under construction (40% of the pipeline) and a further seven in pre-opening.

Group gains

The major hotel groups are all revitalising their New York offerings, with Marriott International planning at least six additions, with Hilton Worldwide and IHG Hotels & Resorts expecting a minimum of five each.

For individual brands, only Soho House, Marriott’s aloft Hotels and Hampton by Hilton have slated more than one project, with two apiece.

Notable additions

One recently-announced project is Plaza Athénée Nobu Hotel and Spa New York. Thanks to a partnership between Nobu Hospitality and Thai real estate group Asset World Corp Public Company Limited will redevelop the luxury Plaza Athénée Hotel New York in the city’s Upper East Side, preserving the original structure and bringing modern simplicity and European classic architecture together. The result will be a 145-key property, Nobu’s first New York site, offering suites with indoor and outdoor glassed terraces and gazebos, with amenities including a traditional Japanese Onsen, spa, and wellness centre, a Nobu omakase experience as well as a bar and lounge and a rooftop area for private parties with panoramic views. The hotel is scheduled to open in 2026.

Another upcoming site is Westin New York Staten Island, which will boost Marriott’s footprint when it arrives in Q2 2024. The 175-key newbuild will include about 15,000 sq ft of event space, a rooftop pool and sky bar lounge, a terrace with outdoor dining, a spa and fitness centre.ihg