There are a lot of hotels under construction in New York, and new data shows that this may be problematic. A new report from the Pratt Center for Community Development argues that hotels are negatively impacting many neighborhoods by undermining affordable housing initiatives and driving out industrial businesses. From 2004 to 2013, 180 hotels were built in New York City, with the bulk of these rising in M1-zoned areas like the Garment District, Long Island City, and Gowanus. Why? Because industrial areas don't require any special approvals for developers to building hotels. The report calls for a change to this practice, and while developers may balk at the idea, it might be better for everyone as the city could be reaching a tipping point when it comes to new hotels.
According to a Times report on new numbers from STR, a hotel research company, the average occupancy rate dropped in January, bringing nightly rates down with it. The average room rate was down nearly 9 percent to $190. A lot of things factor into thisparticularly the strength of the dollar, which deters foreign visitors, who made up nearly a quarter of New York's 56.4 million tourists last yearbut a slew of new hotel rooms certainly plays a part. Last year along, NYC added 4,348 rooms to the existing 108,592, and currently 14,272 more rooms are under construction. A senior hotel research analyst at Baird told the Times, "I think we've passed the point, given current conditions, where it makes sense to build a hotel when you have a piece of land."
But that doesn't mean everyone is deciding to turn their hotels into condos. The manager of the Marmara Park Avenue, newly opened on East 32nd Street, said, "The best way to get your money back is investing in New York — it never fails," while the Hong Kong-based Langham Hospitality Group said New York is a "very, very important hotel market."
· Hotel Development in NYC: Room for Improvement [Pratt Center]
· Hotel Market Staggers in New York City [NYT]
· Coming soon to manufacturing zones: 75 hotels [Crain's]