Boutique hotel owner and operator Morgans Hotel Group Co (MHGC.O) is selling two of its marvelous NYC hotels. Interested buyers can keep in mind that describing these luxury hotels as 'marvelous' is not an exaggeration. The Morgans Hotel website describes their hotels as an experience with “unparalleled service in an intimate, friendly, home-away-from-home atmosphere.”
The Morgans Hotel NYC and Royalton hotel were Sold to Felcor Lodging Trust $500k Per Key on March 31st 2011 -- Read here
Obviously, the Morgan Group is going to praise their own properties. Yet there is plenty of feedback out there to suggest that investing in Morgans NYC hotels is a smart decision. Generally, New York City hotels are a favorite with corporate travelers - especially in a rebounding economy.
 |
|
Image courtesy of blogpurentonline.com |
In the February 1, 2011 edition of the "Business Insider," Morgans NYC Hotel was selected as the "perfect choice for your next trip to NYC." The 'Today in the Pipeline' section highlights an excellent business hotel. The selection was based in part on the hotel's affordable rates for an expense budget, tons of amenities, and its prime location. Morgans Hotels are upscale properties in a dynamic urban setting.
The 'Business Insider' focuses on the hotel's attractions – everything from "decadent beds with down pillows and duvets" to spectacular New York City views. Bids are due this week for the two MHGC.O hotels that are up for sale. Morgans Hotel Group had been struggling under heavy debt. Boutique hotels suffered during the recession as some people saw them as frivolous choices.
For hotel buyers, the sale of Morgans Hotels means that they can pick up luxury hotels for a bargain. Of course, NYC hotels are not cheap purchases but the properties are well-worth the investment. In 2011, there is a renewed interest in luxury real estate. In addition, corporate travel is picking up again. A high percentage of business travel centers on New York City.
"Investors are interested in the luxury market in major centers such as New York. Since valuations in the upscale market fell 30% in 2008 and 45% in 2009, its return should be as impressive as the decline. Investing in a NYC hotel might just lead to a big windfall. Even if investors have to wait awhile for huge paybacks, owning Manhattan property is worth the time and effort.
As the economy improves, corporate travel numbers will rise for Manhattan. It has been proven that corporate travelers play a huge part in driving the hotel sector." ~ "Buying Hotel Growth in NYC - Investors Strategy for Growth in Manhattan Hotel Real Estate" – TOP Hotel Brokers of NYC December 2010 Report
Jones Lang LaSalle Hotels is handling the sale of the Royalton and Morgans hotels for the company which had total liabilities of $801.2 million (as of November 30, 2010). According to Reuters data, its market cap is $282.2 million.
Morgans owns luxury properties in cities such as New York and Miami. Morgans' major investor is Parag Vora of investment firm HG Vora Capital. In November 2010, Vora and his partner, private real estate investment company Highgate Hotels, stated their intentions to discuss various alternatives with Morgans. With two of their NYC hotels now for sale, it is a marvelous time for buyers to invest in luxury real estate in the Big Apple.
The NYC hotel industry is a strong sector. Considering that revenue per room, hotel occupancy, and room rates are all on the rise, investors in NYC hotels within recent years have made a smart decision. Past performances have shown outstanding strength in this area of investment. According to Marc Magazine, managing director for hospitality at the global commercial real estate firm Savills, buyers in 2011 were purchasing NYC lodging properties.
Based on Real Capital Analytics data for January-March 2012, three Manhattan hotels sold for a total of $338.4 million. The current average price per room in New York City hotels is $402,355. The Big Apple's hospitality sector maintains strength. Yet the industry has gone through that feverish pitch stage which always follows a recovery. Consider that the financial breakdown of 2008, led to a bottoming in 2009, and consequently, a recovery during the first months of 2010. Bernard Schwartz, managing director of hotels and lodging assets at Steven Kamali Hospitality, believes that NYC hotel investments during 2011 showed "a summation of the pent-up demand from the recession."
Presently, revenue, room rates, and occupancy are on the increase – even with the consistent rise in the number of guest rooms in New York City. According to PricewaterhouseCoopers, Manhattan hotel occupancy rates increased to 86.6% in the last quarter of 2011 – a rise of 3.7% from the same time in the previous 12 months.
Even though the first quarter is traditionally a slow time of year, NYC's Economic Development Corporation notes that Manhattan occupancy rates for January-March 2012 was 71.7% - a 7% increase over the same time in 2011. In fact, the consistent high occupancy rates have allowed Manhattan hotels to increase their nightly room rates. PricewaterhouseCoopers reports that average daily rates rose by 2.4% to $315.73 between the last quarters of 2010 and 2011.
During the past two years, hotel investors witnessed historically low capitalization rates measuring the rate of return on a real estate investment. Buyers were willing to pay more for properties with less income. Investors hope for a rise in revenues.
The sale of the Union Square W Hotel with its specific debt issues illustrates that point. When its Dubai-based owner went into foreclosure, the property went to auction. Despite the hotel’s debt, several investors put in a bid. These parties were willing to accept that cap rate of a very low number. The investors had faith in the future of the property and viewed it as a "once-in-a-cycle opportunity." Current NYC hotel prices are going through a “more normalized” stage.
During 2012, New York City hotel construction is expected to continue with almost a dozen properties to come into view by the end of this year. According to PricewaterhouseCoopers, developments include seven properties (900 rooms in total) in Lower Manhattan. An additional 24 hospitality properties are planned for 2013 including Extell Development’s 487-room Hyatt Times Square and the McSam Hotel Group’s Holiday Inn Manhattan Financial District at 99 Washington Street.
The NYC hotel investment sales market is much stronger than anywhere else in the US. Analysts expect big hotel sales (especially deals involving foreign purchasers) to continue in 2013. Sean Hennessy, CEO at Lodging Advisors, a Manhattan-based industry consulting firm, says that various properties might soon hit the market in hopes of attracting attract overseas investment.
In March, the Dubai Investment Group put the 509-room Jumeirah Essex House on Central Park South up for sale. The Wall Street Journal believes that the price could reach an amazing $1 million per room. As well, the Helmsley Park Lane Hotel on Central Park South could go on the market. In 2008, this hotel was up for sale but never changed hands.
During April, the New York Post reported that the Sahara Group, an Indian conglomerate, would purchase the Plaza Hotel for $600 million. The price includes $400 million for the building’s hotel component (almost $1.5 million per room), or in other words, the highest per-key trade in the history of NYC hotels. In March 2012, the Hotel Williamsburg was sold to King & Grove Hotels for $33 million ($520,000 for each guest room.) Several NYC hotels have changed hands in the last 18 months. Regardless of the price, NYC hotels are considered a safe investment for local and international buyers.
Image courtesy of photos.slicesintime.com
The current New York City hotel construction scene bears no resemblance to the state of the industry during the recession. Various investors (management firms, private equity companies, hedge funds) are gaining ground in the NYC hospitality sector during 2011. New York City hotel investment is no longer just for a few primary real estate investment trusts.
Hotels in the Big Apple are been built at an unsurpassed pace. Indeed, over 50% of the hotels planned for this year have already opened in New York City. Several openings were delayed but still managed to be ready in either spring, summer, or early autumn. Additional hotel construction will continue in late 2011 and into the New Year.
NYC Hotels – Open for Business – 2011
Early 2011
The magnificent Mondrian New York opened on February 2011.
Spring 2011
The Four Points by Sheraton Long Island/Queensboro Bridge was expected to open on March 3. Although not a surprise for a Starwood hotel, the hotel opened later on April 28.
Summer 2011
Aloft Brooklyn's opening was delayed first from March 31 to April 31. The actual opening date was June 9.
Dream Downtown was supposed to open on Memorial Day. The hotel's opening was June 13.
The ever-changing Portland Square Hotel – Sanctuary Hotel – reopened (for the most part) towards the end of June.
Like Hotel Americano, the Nolitan opening came after many delays. The Nolitan at 30 Kenmare Street opened in July after being postponed nine times.
Located at 1141 Broadway, Robert "Toshi" Chan's Flatiron Hotel opened towards the end of August. Chan and creditor Long Island Bank had been discussing this deal for a while before the opening.
The Hyatt 48 Lex was really expected to open in April but the actual date turned out to be August 29.
Autumn 2011
Situated at 518 West 27th Street, the Hotel Americano designed by Enrique Norton opened in September – following several delays. Originally, a spring opening had been planned for this Chelsea property.
Late 2011 Openings and Possibilities
- Conrad New York at 102 North End and Vesey Streets
- Hyatt Union Square at 13th Street and Park Avenue
- The Out NYC ~ nightclubs in late 2011 but guest room delays
- TRYP by Wyndham
- Graves Charney ~ original opening planned for 2010
- Graves Williamsburg Hotel and Residences
Early 2012
- NoMad Hotel at 1170 Broadway
- The Hilton planned for John F. Kennedy International Airport has also been pushed back to February 2012.
Image courtesy of petitepassport.com
The current New York City hotel construction scene bears no resemblance to the state of the industry during the recession. Various investors (management firms, private equity companies, hedge funds) are gaining ground in the NYC hospitality sector during 2011. New York City hotel investment is no longer just for a few primary real estate investment trusts.
Hotels in the Big Apple are been built at an unsurpassed pace. Indeed, over 50% of the hotels planned for this year have already opened in New York City. Several openings were delayed but still managed to be ready in either spring, summer, or early autumn. Additional hotel construction will continue in late 2011 and into the New Year.
NYC Hotels – Open for Business – 2011
Early 2011
The magnificent Mondrian New York opened on February 2011.
Spring 2011
The Four Points by Sheraton Long Island/Queensboro Bridge was expected to open on March 3. Although not a surprise for a Starwood hotel, the hotel opened later on April 28.
Summer 2011
Aloft Brooklyn's opening was delayed first from March 31 to April 31. The actual opening date was June 9.
Dream Downtown was supposed to open on Memorial Day. The hotel's opening was June 13.
The ever-changing Portland Square Hotel – Sanctuary Hotel – reopened (for the most part) towards the end of June.
Like Hotel Americano, the Nolitan opening came after many delays. The Nolitan at 30 Kenmare Street opened in July after being postponed nine times.
Located at 1141 Broadway, Robert "Toshi" Chan's Flatiron Hotel opened towards the end of August. Chan and creditor Long Island Bank had been discussing this deal for a while before the opening.
The Hyatt 48 Lex was really expected to open in April but the actual date turned out to be August 29.
Autumn 2011
Situated at 518 West 27th Street, the Hotel Americano designed by Enrique Norton opened in September – following several delays. Originally, a spring opening had been planned for this Chelsea property.
Late 2011 Openings and Possibilities
- Conrad New York at 102 North End and Vesey Streets
- Hyatt Union Square at 13th Street and Park Avenue
- The Out NYC ~ nightclubs in late 2011 but guest room delays
- TRYP by Wyndham
- Graves Charney ~ original opening planned for 2010
- Graves Williamsburg Hotel and Residences
Early 2012
- NoMad Hotel at 1170 Broadway
- The Hilton planned for John F. Kennedy International Airport has also been pushed back to February 2012.
Image courtesy of petitepassport.com
The current New York City hotel construction scene bears no resemblance to the state of the industry during the recession. Various investors (management firms, private equity companies, hedge funds) are gaining ground in the NYC hospitality sector during 2011. New York City hotel investment is no longer just for a few primary real estate investment trusts.
Hotels in the Big Apple are been built at an unsurpassed pace. Indeed, over 50% of the hotels planned for this year have already opened in New York City. Several openings were delayed but still managed to be ready in either spring, summer, or early autumn. Additional hotel construction will continue in late 2011 and into the New Year.
NYC Hotels – Open for Business – 2011
Early 2011
The magnificent Mondrian New York opened on February 2011.
Spring 2011
The Four Points by Sheraton Long Island/Queensboro Bridge was expected to open on March 3. Although not a surprise for a Starwood hotel, the hotel opened later on April 28.
Summer 2011
Aloft Brooklyn's opening was delayed first from March 31 to April 31. The actual opening date was June 9.
Dream Downtown was supposed to open on Memorial Day. The hotel's opening was June 13.
The ever-changing Portland Square Hotel – Sanctuary Hotel – reopened (for the most part) towards the end of June.
Like Hotel Americano, the Nolitan opening came after many delays. The Nolitan at 30 Kenmare Street opened in July after being postponed nine times.
Located at 1141 Broadway, Robert "Toshi" Chan's Flatiron Hotel opened towards the end of August. Chan and creditor Long Island Bank had been discussing this deal for a while before the opening.
The Hyatt 48 Lex was really expected to open in April but the actual date turned out to be August 29.
Autumn 2011
Situated at 518 West 27th Street, the Hotel Americano designed by Enrique Norton opened in September – following several delays. Originally, a spring opening had been planned for this Chelsea property.
Late 2011 Openings and Possibilities
- Conrad New York at 102 North End and Vesey Streets
- Hyatt Union Square at 13th Street and Park Avenue
- The Out NYC ~ nightclubs in late 2011 but guest room delays
- TRYP by Wyndham
- Graves Charney ~ original opening planned for 2010
- Graves Williamsburg Hotel and Residences
Early 2012
- NoMad Hotel at 1170 Broadway
- The Hilton planned for John F. Kennedy International Airport has also been pushed back to February 2012.
Image courtesy of petitepassport.com
The NYC hotel sector continues to grow and a new trend is evident outside Manhattan. New York City hotel development is experiencing new heights in boroughs beyond Manhattan. During 2011, almost 40% of new NYC hotels will be in other boroughs.
Beyond Manhattan
Image courtesy of theflack.blogspot.com
Since 2008, 42% of new NYC hotel properties were located outside Manhattan. Statistics show development in Queens at 22%, Brooklyn 15%, Bronx 3%, and Staten Island 2%. Overall, the Big Apple has a flourishing hotel industry. New York City, the fifth-largest U.S. market, has the most guest rooms under construction.
Approximately 5,850 rooms are planned in boroughs outside Manhattan within the next four years. Currently, this global center has almost 86,230 rooms in its active inventory. The room count is expected to reach almost 90,000 rooms by the end of 2011. Forty NYC projects are planned to open between 2011 and 2013.
International Markets
New York City expects more demand from international markets for leisure and business travel. Markets in Australia, South Korea, and Brazil indicate a tremendous interest in NYC hotels.
The Big Apple's hotel inventory offers varied options for all types of guests. NYC occupancy rates remain higher than the national average. During 2010, New York City had an average occupancy rate of 85% with an ADR of $255. In recent years, NYC hotel development has been able to stay ahead of the increased demand for accommodations at various price ranges in all boroughs.
Between the beginning of 2008 and end of 2010, New York City went through the fastest and most profitable hotel-building boom. During that two year period, the city saw almost 24% increase in accommodations including new hotels in Brooklyn, Queens, Staten Island, and the Bronx. Remarkably, occupancy rates and ADR stayed strong during this development. George Fertitta, CEO of NYC & Company, confirmed that the city entertained welcomed 48.7 million visitors during 2010 - a record for the New York City tourism industry.
Fertitta explains, "Hotel development is an important part of attracting domestic and international visitors to New York City. The rise in development activity reflects the strong demand for accessible accommodations in all five boroughs."
Experience New York City
Hotel stays in boroughs outside Manhattan allow guests to experience more of New York City. Affordable options are available across the city. As well, hotels are opening in Manhattan neighborhoods – especially Harlem, SoHo, and Lower Manhattan. New ventures include the Aloft Harlem, Mondrian SoHo, The James New York, Sheraton Tribeca New York Hotel, and the W New York-Downtown, as well as the Doubletree New York City-Financial District.
In addition, Midtown Manhattan is experiencing strong growth. Midtown is home to New York City's largest hotel in more than ten years. The 669-room Yotel is expected to open its doors next month in Times Square.
Despite additional hotel room inventory, early 2011 performance indicates that NYC hotels are absorbing the rising demand for hotel rooms. Occupancy rates and ADR are on track to meet or exceed seasonal performance. In April 2011, the occupancy rate in New York City increased to almost 88% with ADR at $263.
The NYC hotel sector continues to grow and a new trend is evident outside Manhattan. New York City hotel development is experiencing new heights in boroughs beyond Manhattan. During 2011, almost 40% of new NYC hotels will be in other boroughs.
Beyond Manhattan
Image courtesy of theflack.blogspot.com
Since 2008, 42% of new NYC hotel properties were located outside Manhattan. Statistics show development in Queens at 22%, Brooklyn 15%, Bronx 3%, and Staten Island 2%. Overall, the Big Apple has a flourishing hotel industry. New York City, the fifth-largest U.S. market, has the most guest rooms under construction.
Approximately 5,850 rooms are planned in boroughs outside Manhattan within the next four years. Currently, this global center has almost 86,230 rooms in its active inventory. The room count is expected to reach almost 90,000 rooms by the end of 2011. Forty NYC projects are planned to open between 2011 and 2013.
International Markets
New York City expects more demand from international markets for leisure and business travel. Markets in Australia, South Korea, and Brazil indicate a tremendous interest in NYC hotels.
The Big Apple's hotel inventory offers varied options for all types of guests. NYC occupancy rates remain higher than the national average. During 2010, New York City had an average occupancy rate of 85% with an ADR of $255. In recent years, NYC hotel development has been able to stay ahead of the increased demand for accommodations at various price ranges in all boroughs.
Between the beginning of 2008 and end of 2010, New York City went through the fastest and most profitable hotel-building boom. During that two year period, the city saw almost 24% increase in accommodations including new hotels in Brooklyn, Queens, Staten Island, and the Bronx. Remarkably, occupancy rates and ADR stayed strong during this development. George Fertitta, CEO of NYC & Company, confirmed that the city entertained welcomed 48.7 million visitors during 2010 - a record for the New York City tourism industry.
Fertitta explains, "Hotel development is an important part of attracting domestic and international visitors to New York City. The rise in development activity reflects the strong demand for accessible accommodations in all five boroughs."
Experience New York City
Hotel stays in boroughs outside Manhattan allow guests to experience more of New York City. Affordable options are available across the city. As well, hotels are opening in Manhattan neighborhoods – especially Harlem, SoHo, and Lower Manhattan. New ventures include the Aloft Harlem, Mondrian SoHo, The James New York, Sheraton Tribeca New York Hotel, and the W New York-Downtown, as well as the Doubletree New York City-Financial District.
In addition, Midtown Manhattan is experiencing strong growth. Midtown is home to New York City's largest hotel in more than ten years. The 669-room Yotel is expected to open its doors next month in Times Square.
Despite additional hotel room inventory, early 2011 performance indicates that NYC hotels are absorbing the rising demand for hotel rooms. Occupancy rates and ADR are on track to meet or exceed seasonal performance. In April 2011, the occupancy rate in New York City increased to almost 88% with ADR at $263.
The NYC hotel sector continues to grow and a new trend is evident outside Manhattan. New York City hotel development is experiencing new heights in boroughs beyond Manhattan. During 2011, almost 40% of new NYC hotels will be in other boroughs.
Beyond Manhattan
Image courtesy of theflack.blogspot.com
Since 2008, 42% of new NYC hotel properties were located outside Manhattan. Statistics show development in Queens at 22%, Brooklyn 15%, Bronx 3%, and Staten Island 2%. Overall, the Big Apple has a flourishing hotel industry. New York City, the fifth-largest U.S. market, has the most guest rooms under construction.
Approximately 5,850 rooms are planned in boroughs outside Manhattan within the next four years. Currently, this global center has almost 86,230 rooms in its active inventory. The room count is expected to reach almost 90,000 rooms by the end of 2011. Forty NYC projects are planned to open between 2011 and 2013.
International Markets
New York City expects more demand from international markets for leisure and business travel. Markets in Australia, South Korea, and Brazil indicate a tremendous interest in NYC hotels.
The Big Apple's hotel inventory offers varied options for all types of guests. NYC occupancy rates remain higher than the national average. During 2010, New York City had an average occupancy rate of 85% with an ADR of $255. In recent years, NYC hotel development has been able to stay ahead of the increased demand for accommodations at various price ranges in all boroughs.
Between the beginning of 2008 and end of 2010, New York City went through the fastest and most profitable hotel-building boom. During that two year period, the city saw almost 24% increase in accommodations including new hotels in Brooklyn, Queens, Staten Island, and the Bronx. Remarkably, occupancy rates and ADR stayed strong during this development. George Fertitta, CEO of NYC & Company, confirmed that the city entertained welcomed 48.7 million visitors during 2010 - a record for the New York City tourism industry.
Fertitta explains, "Hotel development is an important part of attracting domestic and international visitors to New York City. The rise in development activity reflects the strong demand for accessible accommodations in all five boroughs."
Experience New York City
Hotel stays in boroughs outside Manhattan allow guests to experience more of New York City. Affordable options are available across the city. As well, hotels are opening in Manhattan neighborhoods – especially Harlem, SoHo, and Lower Manhattan. New ventures include the Aloft Harlem, Mondrian SoHo, The James New York, Sheraton Tribeca New York Hotel, and the W New York-Downtown, as well as the Doubletree New York City-Financial District.
In addition, Midtown Manhattan is experiencing strong growth. Midtown is home to New York City's largest hotel in more than ten years. The 669-room Yotel is expected to open its doors next month in Times Square.
Despite additional hotel room inventory, early 2011 performance indicates that NYC hotels are absorbing the rising demand for hotel rooms. Occupancy rates and ADR are on track to meet or exceed seasonal performance. In April 2011, the occupancy rate in New York City increased to almost 88% with ADR at $263.
NEW YORK (Reuters) - 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.
Read More.. http://www.reuters.com/article/idUSTRE64900220100510
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.
Read More.. http://www.reuters.com/article/idUSTRE64900220100510
From the corporate board rooms to the social networks, NYC hotels are a 'trending' topic. Everyone is abuzz about the New York City hotel industry because it is a dynamic market that appeals to today's investors. Savvy buyers recognize the trends in the city's hotel market.
Upwards Trends at least till the End of 2014
Associations/companies
Hotel Brokers International
American Hotel & Lodging Association
Asian American Hotel Owners Association
International Hotel & Restaurant Association
Smith Travel Research
Industry Publications - Print and Internet
Daily Lodging Report
E-Hospitality
Hotel Business
Hospitality Net
Hotel & Motel Management
Hotel Business
Hotel Interactive
Hotel Journal
Hotel Online
Hotel Resource
Lodging Hospitality
Lodging Magazine
Real Time Hotel Reports
Reed Business
Industry Conferences
AAHOA Annual Convention Americas Lodging Investment Summit (ALIS) - Los Angeles
Caribbean Hotel/Tourism Investment Conference (CHTIC)
Hotel Investment Conference Asia Pacific (HICAP)-Hong Kong
International Hotel Investment Forum (IHIF)-Berlin
NYU International Hospitality Industry Investment Conference - New York
The Lodging Conference - Phoenix
Hotel Investment Conference - Atlanta, GA
International Hotel/Motel & Restaurant Show - New York, NY
Choice Hotels International Convention - Choice Licensees ONLY
Intercontinental Hotels Group Conference - Licensees Only
Americas Best Values Inns - Licensees Only
Best Western International Conference - Licensees Only