N.Y. hotel market braces for supply boom

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 colors 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 travelers 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 percent in New York's five boroughs and neighboring Rockland and Westchester counties, the most since at least 2002, according to PKF Consulting.

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In Manhattan alone, the number of new hotel rooms is expected to jump nearly 10 percent, 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.

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?" Woronka said. "New York is kind of the poster child for that answer."

‘Always resilient’
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.

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

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FOR SUBSCRIBERSCBP leaders cut out of Trump ad buy decision

FOR SUBSCRIBERSAmerican passenger drafted goodbye texts to her family as Flydubai plane plummeted

FOR SUBSCRIBERSCornell rape allegation pushes embattled New York prosecutor into national spotlight

FOR SUBSCRIBERSAbdul El-Sayed tries to woo MAHA voters as Democrats seek inroads with RFK’s supporters

FOR SUBSCRIBERSKratom-like substances are popping up in a typically benign supplement

FOR SUBSCRIBERSGOP super PAC increases its spending for Sen. Jon Husted in tough Ohio race

FOR SUBSCRIBERSRecords reveal tumultuous marriage between slain New York Times executive and wife

FOR SUBSCRIBERSFrom clean energy warrior to ‘wall of shame,’ James Talarico reverses on a fossil fuel money pledge

FOR SUBSCRIBERSCongressional staff planned official trip with luxury stops in Italy and France weeks before election

FOR SUBSCRIBERSA harrowing ordeal aboard an Israel-bound plane

FOR SUBSCRIBERSOpenAI CEO Sam Altman to skip congressional hearing on rogue AI agents

FOR SUBSCRIBERSKey DOJ lawyers departed Trump ‘grand conspiracy’ probe amid pressure to produce, source says

FOR SUBSCRIBERSTrump’s new AI chatbot often links to a site launched under Clinton 26 years ago

FOR SUBSCRIBERSAt MAHA summit, industry CEOs the movement once vilified take the stage

FOR SUBSCRIBERSThis Paralympian has two goals: Win medals and give away $500,000 to her teammates

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 the Trump Organization.

"Luxury should mean quality," she said. "Luxury stands the test of time."

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 percent from 2009, according to NYC & Co, New York's official tourism organization. The group projects there will be 6,700 new hotel rooms this year.

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

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