By Orlando Lee Rodriguez
For most of the last 20-odd years or so, the Manhattan hotel market was not one to see much growth in the supply of hotel rooms, and with good reason.
In 1993, New York City saw 1,946 homicides and 86,001 robberies, and that was a 2.5 and 5.7 respective percent drop from the year before.
Compare those crime numbers with 2012, when there were 414 total murders. Crime is down so much in fact, that on November 26, there was not a single shooting, stabbing or homicide recorded. Lower crime has helped to bring in a record 52 million visitors last year and has driven construction of new hotels, more than 70 opening between 2008 and 2012, according to a market study by HVS Global Hospitality Services and NYU Preston Robert Tisch Center.
One area that has seen a hospitality boom is the Garment District, its prime location between Times Square and Penn Station making a natural fit for tourists who can walk north and south to popular spots.
“This part of Manhattan is actually dead center,” said Abraham Hidary, president of Hidrock Realty and the developer of the new Spring Hill Suites hotel on West 37th Street. “With all the tech firms and all the activity going down, in Chelsea and Flatiron, this area becomes even more center that it was before.”
The 173-room Spring Hill Suites project, a joint venture between Hidrock and the Robert Finvarb Companies, is the second Marriott-branded and managed hotel to open in the Garment District in the past month. The other, a 167-room Courtyard by Marriott, is located two blocks down Sixth Avenue.
Hidrock, already a commercial player in the surrounding neighborhood, sees the foray into hospitality as a progression based on what they say is tremendous growth potential in the Herald Square/Garment District area.
“We have four office buildings within a couple of blocks of here,” said Hidary. “The tenant profile is media professionals, firms that we have never seen before. Their vendors and customers are coming [to NYC] and they need a place to stay.”
The Spring Hill Suites venture is also the 300th location for the Marriott-run suite brand, which specializes is offering more square footage per unit than Courtyard, for example.
“It is a product that is fashioned around design,” said David Marriott, chief operations officer for Marriott International’s Eastern Region in the Americas. “It’s a little bit more contemporary than your Courtyard look and feel. Courtyard is really geared to the business traveler. Spring Hill is really able to handle both business and leisure travelers, because of the suite and the size of the room.”
Marriott whose company has 10 different brands in the New York area, said that there was a reason why it took a while for the Spring Hill brand to make it to Manhattan.
“We wanted to find the right partner [and] we were able to do that with the Hidary family,” said Marriott. “We wanted to find the right location also, and we feel that the Garment District is on the rise and continues to be an up and coming neighborhood.
“The Fashion District is a place a lot of people want to be now. People do business here, but it is a huge leisure destination as well. Occupancy has continued to remain so strong in the city. We’d like to see rates continue to grow.”
How strong rates will grow in anybody’s guess. With over 90,000 hotel rooms in the city, it could be thought that the boom in hotel rooms will lead to an over-saturation. But according to the 2012 HVS Overview, the Manhattan market didn’t have enough hotel rooms to meet the demand for years, allowing prices to rise.
“As a result of the supply and demand dynamics, the market has been historically under-supplied,” the HVS report said. “Over the last 24 years, average annual demand growth, at 2.1 percent, has outpaced corresponding growth in supply, at 1.7 percent. The Manhattan lodging market represents one of only five major markets among the top 25 in the U.S. to have maintained such a positive differential between supply and demand over the same period.”
That being said, any explosion in hotel construction is just making up for lost time and answering demand that continues to grow.
Growth in the tourism sector, Hidary says, is also having a positive effect on the retail market in the Garment District, turning into another 24-hour neighborhood.
“As these hotels are built and are opening you see the retail changing on the side streets,” said Hidary. “Typically, you used to see small, apparel shops, now they have restaurants and bars. It’s a lot of fun to come outside at night.”