...The explosion of hotel construction isn’t just about record tourism in New York, although some might say that is reason enough. Last year, 56.4 million tourists visited the city, the most ever, and well ahead of the 55 million predicted. The number of visitors soared 23 percent since 2009, when the New York hotel industry suffered a 22.6 percent year-over-year decline in average daily rates, and 26.4 percent drop in RevPAR.
“Hotels respond faster to cycles than other asset classes, which is one reason driving the hotel boom,” said Matthew Baron, president of Simon Baron Development, which is building a 30-story, 250-room Tommie Hotel, part of a chain of “micro-hotels” with small rooms and communal spaces aimed at younger travelers, on East 31st Street in NoMad. “It was the most distressed asset during the downturn because it’s nightly. On the flip side, when the market rebounds, you can go from $100 a night to $300 overnight.”
Additionally, no new hotels were built during the recession, according to Marc Magazine, executive managing director at Savills Studley. Before that, during 2005 and 2006, many hotel rooms came off-line to become condos, he said. That helped set the stage for accelerated construction once the economy rebounded, Magazine said.
Developers have also been building more boutique hotels on smaller and cheaper mid-block sites with a faster turnaround time, said Mark VanStekelenburg, senior vice president and practice leader at CBRE Hotels PKF Consulting USA...Big Apple’s hotel boom may have soft spots
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