International hotel brands are coming to New York City. In April 2011, TRYP, part of the Sol Melia group with a huge presence among European business travelers, is opening a 173-room property near Times Square. NH-Hotels, based in Spain and well-known in Europe and Latin America, has property already in New York. This Spanish limited-service chain is also interested in the Miami Florida market. India's Taj hotels can be found in New York (the Pierre), Boston, and San Francisco.
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Image courtesy of hotelsoftherichandfamous.com |
Many Americans might be under the impression that only U.S. brands can ever break into this country's hotel market. Several internationally-based hotel companies, however, are interested in establishing themselves in the American market especially in major centers such as New York City.
Why would International Hotel Brands consider moving to New York City?
International investors will move to New York City for the same reason that local investors prefer the NYC market. Investing in hotels in the Big Apple is a smart investment. Although no ventures are 100% risk-free, investing in this global center is almost certain to be a profitable choice.
Generally, foreign buyers are interested in buying NYC hotels. The next step would be to move international hotel brands into the US. Foreign parties are interested and determined to gain a foothold in the U.S. marketplace.
Which International Hotel Companies are interested in the U.S. Market?
Most likely, many hotel companies want to move into the American market. Several international hotel brands have expressed an interest in the US. It is a safe bet that other international brands are thinking along those lines even if they did not announce that intent.
Recently, Editor-in-chief Glenn Haussman, Hotel Interactive, Inc., moderated an interesting and informative ALIS (American Lodging Investment Summit) panel. The topic for discussion centered on internationally-based brands trying to move into the hotel market in the U.S. and the Americas. The participants included Narain, director of development/the Americas for India’s Taj Hotels Resorts and Palaces, James Erlacher, from Dubai-based Jumeirah Group (ultra-luxury brand), Daniel del Olmo, brand senior vice president of TRYP, Wyndham’s new, 92-property select service (boutique brand), and Francisco Zinger Cieslik, COO of NH-Hotels, Madrid (limited-service hotels).
The panel participants represented different countries and diverse hotel brands. Yet there was one constant at this session. All the international hotel companies were interested in setting up in the US. In fact, these hotel executives even talked about a more targeted goal.
"All agreed New York City is the place to make a global statement." ~ HotelInteractive.com
Will International Hotel Brands be Successful in Moving to New York City?
Frankly, despite their will and determination, international hotel brands will find it challenging to move to the US. Of course, the foreign hotel executives are aware of the obstacles. With such a lucrative market in sight, however, especially in cities like New York City, international executives are determined to reach their goals. Daniel del Olmo summed up in one word why foreign brands are focusing on the US. "Demand," explained del Olmo.
Source: http://hotelinteractive.com/article.aspx?articleid=19665
http://www.wyndhamworldwide.com/media_center/pr/show_release.cfm?id=755
International hotel brands are coming to New York City. In April 2011, TRYP, part of the Sol Melia group with a huge presence among European business travelers, is opening a 173-room property near Times Square. NH-Hotels, based in Spain and well-known in Europe and Latin America, has property already in New York. This Spanish limited-service chain is also interested in the Miami Florida market. India's Taj hotels can be found in New York (the Pierre), Boston, and San Francisco.
|
|
Image courtesy of hotelsoftherichandfamous.com |
Many Americans might be under the impression that only U.S. brands can ever break into this country's hotel market. Several internationally-based hotel companies, however, are interested in establishing themselves in the American market especially in major centers such as New York City.
Why would International Hotel Brands consider moving to New York City?
International investors will move to New York City for the same reason that local investors prefer the NYC market. Investing in hotels in the Big Apple is a smart investment. Although no ventures are 100% risk-free, investing in this global center is almost certain to be a profitable choice.
Generally, foreign buyers are interested in buying NYC hotels. The next step would be to move international hotel brands into the US. Foreign parties are interested and determined to gain a foothold in the U.S. marketplace.
Which International Hotel Companies are interested in the U.S. Market?
Most likely, many hotel companies want to move into the American market. Several international hotel brands have expressed an interest in the US. It is a safe bet that other international brands are thinking along those lines even if they did not announce that intent.
Recently, Editor-in-chief Glenn Haussman, Hotel Interactive, Inc., moderated an interesting and informative ALIS (American Lodging Investment Summit) panel. The topic for discussion centered on internationally-based brands trying to move into the hotel market in the U.S. and the Americas. The participants included Narain, director of development/the Americas for India’s Taj Hotels Resorts and Palaces, James Erlacher, from Dubai-based Jumeirah Group (ultra-luxury brand), Daniel del Olmo, brand senior vice president of TRYP, Wyndham’s new, 92-property select service (boutique brand), and Francisco Zinger Cieslik, COO of NH-Hotels, Madrid (limited-service hotels).
The panel participants represented different countries and diverse hotel brands. Yet there was one constant at this session. All the international hotel companies were interested in setting up in the US. In fact, these hotel executives even talked about a more targeted goal.
"All agreed New York City is the place to make a global statement." ~ HotelInteractive.com
Will International Hotel Brands be Successful in Moving to New York City?
Frankly, despite their will and determination, international hotel brands will find it challenging to move to the US. Of course, the foreign hotel executives are aware of the obstacles. With such a lucrative market in sight, however, especially in cities like New York City, international executives are determined to reach their goals. Daniel del Olmo summed up in one word why foreign brands are focusing on the US. "Demand," explained del Olmo.
Source: http://hotelinteractive.com/article.aspx?articleid=19665
http://www.wyndhamworldwide.com/media_center/pr/show_release.cfm?id=755
In the recent 19th Annual Survey released by the Association of Foreign Investment in Real Estate (AFIRE), New York City took top spot over London, the previous winner, as first choice for foreign investors in 2011. Being the winner in this survey is a big deal. London has held either first or second spot in this survey since 2001. London has dropped now to third place and New York City emerged the winner. Washington was named as the second top choice of foreign investors.
New York City and Washington DC
In the recent 19th Annual Survey released by the Association of Foreign Investment in Real Estate (AFIRE), New York City took top spot over London, the previous winner, as first choice for foreign investors in 2011. Being the winner in this survey is a big deal. London has held either first or second spot in this survey since 2001. London has dropped now to third place and New York City emerged the winner. Washington was named as the second top choice of foreign investors.
New York City and Washington DC
In the recent 19th Annual Survey released by the Association of Foreign Investment in Real Estate (AFIRE), New York City took top spot over London, the previous winner, as first choice for foreign investors in 2011. Being the winner in this survey is a big deal. London has held either first or second spot in this survey since 2001. London has dropped now to third place and New York City emerged the winner. Washington was named as the second top choice of foreign investors.
New York City and Washington DC
Recently, investors have expressed tremendous enthusiasm about the NYC hotel market. As occupancy rates drop and room rates increase, buyers are interested in Manhattan hotels.
Palace Hotel
One recent sale involved the famous Palace Hotel on Madison Avenue. On May 19, the Wall Street Journal reported that a deal was reached to sell this Manhattan hotel for $400 million ($445,000 per room). The property is under contract to be bought by Northwood Investors, a real-estate investment advisory firm founded by John Z. Kukral, the former chief executive of Blackstone Real Estate Advisors.
According to Leslie Lefkowitz, the upscale hotel's director of communications, the sale is expected to close in mid-July. The seller, an affiliate of the Brunei Investment Agency, bought the 899-room hotel in 1993.
Lower East Side Hotel
Brack Capital Real Estate and InterContinental Hotels Group (IHG), a joint venture, have bought 180 Orchard St. for almost $46 million. The buyers plan to turn the halted development project into a 290-room hostelry including retail space and parking.
The property will be a Hotel Indigo - a boutique brand and part of IHG inventory including InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, as well as Holiday Inn Hotels & Resorts. The planned opening is set for 2013.
The hotel will feature amenities such as a restaurant, bar, state-of-the-art fitness center, and outdoor pool. The Hotel Indigo on Orchard Street will offer outstanding accommodations with high ceilings and upper level guest rooms offering unsurpassed views of New York City. Of course, the décor is bound to reflect the signature Hotel Indigo standard. The hotel will feature luxurious guestrooms with oversized beds and hard-surface flooring, spa-inspired showers with Aveda products, and free wired or wireless high-speed internet access.
The property is a prime development site. This project should benefit neighborhood residents and add general value to the area. The Orchard Street hotel is one of two development projects by Amsterdam-based Brack. This company is also involved in a boutique property on Times Square.
Brack
Brack has developed over 3,000,000 square feet of office, hotel, and retail space as well as 3,000 residential properties across the globe. Brack's New York portfolio include the James New York Hotel (27 Grand St.), Greystone Hotel (212 W. 91st St.), Olcott (27 W. 72nd St.), Element (555 W. 59th St.), and Hilton Garden Inn (63 W. 35th St.) as well as 15 Union Square West and 90 West St.
IHG
InterContinental Hotels Group (IHG), one of the hospitality sector's most respected companies, handles well-known hotel brands such as InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Hotel Indigo, Holiday Inn Hotels & Resorts, Holiday Inn Express and Staybridge Suites, as well as Candlewood Suites. IHG continues to target markets around the globe. Indeed, IHG is the world's largest hotel group by number of rooms. IHG franchises, leases, manage or owns, through several subsidiaries, more than 4,400 hotels (over 645,000 rooms) in 100 countries and territories.
290-room hotel set for Lower East Side
Image courtesy of newyorkwelcome.net
Recently, investors have expressed tremendous enthusiasm about the NYC hotel market. As occupancy rates drop and room rates increase, buyers are interested in Manhattan hotels.
Palace Hotel
One recent sale involved the famous Palace Hotel on Madison Avenue. On May 19, the Wall Street Journal reported that a deal was reached to sell this Manhattan hotel for $400 million ($445,000 per room). The property is under contract to be bought by Northwood Investors, a real-estate investment advisory firm founded by John Z. Kukral, the former chief executive of Blackstone Real Estate Advisors.
According to Leslie Lefkowitz, the upscale hotel's director of communications, the sale is expected to close in mid-July. The seller, an affiliate of the Brunei Investment Agency, bought the 899-room hotel in 1993.
Lower East Side Hotel
Brack Capital Real Estate and InterContinental Hotels Group (IHG), a joint venture, have bought 180 Orchard St. for almost $46 million. The buyers plan to turn the halted development project into a 290-room hostelry including retail space and parking.
The property will be a Hotel Indigo - a boutique brand and part of IHG inventory including InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, as well as Holiday Inn Hotels & Resorts. The planned opening is set for 2013.
The hotel will feature amenities such as a restaurant, bar, state-of-the-art fitness center, and outdoor pool. The Hotel Indigo on Orchard Street will offer outstanding accommodations with high ceilings and upper level guest rooms offering unsurpassed views of New York City. Of course, the décor is bound to reflect the signature Hotel Indigo standard. The hotel will feature luxurious guestrooms with oversized beds and hard-surface flooring, spa-inspired showers with Aveda products, and free wired or wireless high-speed internet access.
The property is a prime development site. This project should benefit neighborhood residents and add general value to the area. The Orchard Street hotel is one of two development projects by Amsterdam-based Brack. This company is also involved in a boutique property on Times Square.
Brack
Brack has developed over 3,000,000 square feet of office, hotel, and retail space as well as 3,000 residential properties across the globe. Brack's New York portfolio include the James New York Hotel (27 Grand St.), Greystone Hotel (212 W. 91st St.), Olcott (27 W. 72nd St.), Element (555 W. 59th St.), and Hilton Garden Inn (63 W. 35th St.) as well as 15 Union Square West and 90 West St.
IHG
InterContinental Hotels Group (IHG), one of the hospitality sector's most respected companies, handles well-known hotel brands such as InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Hotel Indigo, Holiday Inn Hotels & Resorts, Holiday Inn Express and Staybridge Suites, as well as Candlewood Suites. IHG continues to target markets around the globe. Indeed, IHG is the world's largest hotel group by number of rooms. IHG franchises, leases, manage or owns, through several subsidiaries, more than 4,400 hotels (over 645,000 rooms) in 100 countries and territories.
Recently, investors have expressed tremendous enthusiasm about the NYC hotel market. As occupancy rates drop and room rates increase, buyers are interested in Manhattan hotels.
Palace Hotel
One recent sale involved the famous Palace Hotel on Madison Avenue. On May 19, the Wall Street Journal reported that a deal was reached to sell this Manhattan hotel for $400 million ($445,000 per room). The property is under contract to be bought by Northwood Investors, a real-estate investment advisory firm founded by John Z. Kukral, the former chief executive of Blackstone Real Estate Advisors.
According to Leslie Lefkowitz, the upscale hotel's director of communications, the sale is expected to close in mid-July. The seller, an affiliate of the Brunei Investment Agency, bought the 899-room hotel in 1993.
Lower East Side Hotel
Brack Capital Real Estate and InterContinental Hotels Group (IHG), a joint venture, have bought 180 Orchard St. for almost $46 million. The buyers plan to turn the halted development project into a 290-room hostelry including retail space and parking.
The property will be a Hotel Indigo - a boutique brand and part of IHG inventory including InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, as well as Holiday Inn Hotels & Resorts. The planned opening is set for 2013.
The hotel will feature amenities such as a restaurant, bar, state-of-the-art fitness center, and outdoor pool. The Hotel Indigo on Orchard Street will offer outstanding accommodations with high ceilings and upper level guest rooms offering unsurpassed views of New York City. Of course, the décor is bound to reflect the signature Hotel Indigo standard. The hotel will feature luxurious guestrooms with oversized beds and hard-surface flooring, spa-inspired showers with Aveda products, and free wired or wireless high-speed internet access.
The property is a prime development site. This project should benefit neighborhood residents and add general value to the area. The Orchard Street hotel is one of two development projects by Amsterdam-based Brack. This company is also involved in a boutique property on Times Square.
Brack
Brack has developed over 3,000,000 square feet of office, hotel, and retail space as well as 3,000 residential properties across the globe. Brack's New York portfolio include the James New York Hotel (27 Grand St.), Greystone Hotel (212 W. 91st St.), Olcott (27 W. 72nd St.), Element (555 W. 59th St.), and Hilton Garden Inn (63 W. 35th St.) as well as 15 Union Square West and 90 West St.
IHG
InterContinental Hotels Group (IHG), one of the hospitality sector's most respected companies, handles well-known hotel brands such as InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Hotel Indigo, Holiday Inn Hotels & Resorts, Holiday Inn Express and Staybridge Suites, as well as Candlewood Suites. IHG continues to target markets around the globe. Indeed, IHG is the world's largest hotel group by number of rooms. IHG franchises, leases, manage or owns, through several subsidiaries, more than 4,400 hotels (over 645,000 rooms) in 100 countries and territories.
290-room hotel set for Lower East Side
Investors are willing to pay record prices for NYC hotels. Of course, the economy is recovering – although not at a quick pace. Yet economic improvements are occurring at a slow and consistent rate.
According to research firm Real Capital Analytics Inc., hotel prices rose to almost $185,000 per room during the first quarter of 2011. Five years ago, values were at a peak - $153,000 a room – but dropped 37% in 2008. Current record prices being paid by investors for U.S. hotels, however, might be outpacing gains in room rates and stays.
Increased Transactions
No doubt, this year's price increases are due to the rise in upscale hotel transactions as well as other purchases by real estate investment trusts (REITs) - especially in urban centers. At present, occupancy and room rates continue to climb – although the gains do not match the current prices for several full-service hotels.
Improved Fundamentals
Fundamentals are showing improvement. On the average, asset prices have affected fundamentals. Yet the current economy is not in 'peak' mode but the market is doing well under the present economic circumstances. Industry experts would prefer, however, a quicker pace of economic recovery.
New York City Hotel Prices
During September 2010, The Hilton Garden Inn Chelsea in New York City sold for $68.4 million. Three years earlier, this hotel had been listed at $55 million. The 2010 purchase price was 24% higher than in 2007.
In fact, values have even risen in smaller markets outside key centers. At the recent New York International Hospitality Industry Investment Conference, Barry Sternlicht, founder of real estate investor Starwood Property Trust Inc., explained, "Pricing is pretty aggressive. Even for generic hotels you get 20, 30 bids.”
In April 2011, FelCor Lodging Trust Inc. agreed to buy the NYC boutique hotels – Morgans and Royalton - from Morgans Hotel Group Co. for $140 million (almost $500,000 per room). Texas-based FelCor looks for hotels that "purchased at a substantial discount to replacement cost, will earn a 10 percent cash yield within a short time."
Real Statistics
According to Real Capital, daily room rates averaged $94.05 during 2010. Revenue per available room (RevPAR) was $42.40 – below the 2008 peak of $106.65 and $54.42. RevPAR is an industry measure of occupancy and rate.
Rising Sales
Towards the beginning of 2011, Jones Lang LaSalle Inc.’s hotel investment-services unit predicted that hotel sales could increase up to 25% this year. Due to the extraordinary demand from REITs (over $1.6 billion in hotels bought in first quarter), values have risen these past few months. The recent REIT statistics reflect 44% of trades and five times the total of REIT purchases during 2007 – a peak year for hotel investment.
REITs
REITs have their sights on full-service properties in urban centers. This week, Pebblebrook Hotel Trust agreed to buy stakes in six New York boutique hotels for $152 million. Pebblebrook is proceeding with this arrangement as part of a joint venture with Denihan Hospitality Group.
Occupancy Rates
Within the top 25 U.S. markets, occupancies rose to 63% in the first 2011 quarter. According to Smith Travel Research Inc., occupancies came in at 60% during 2010. Stays at expensive hotels have increased to 67% - up 4% from last year.
Replacement Costs
In a few instances, hotel values are higher than replacement costs. The high values might indicate more new hotels in the near future. In New York City, hotels trade regularly at $200,000 a room over the cost of replacement. Hotel demand is tied to the general state of the economy.
Potential Growth
Many hotel buyers believe that high prices are warranted if there is potential for future growth. As well, investors tend to be pleased with prices if lower than the cost required to build the property at that location.
Hotel Investors Inflate Property Prices Past Demand for Lodging
Image courtesy of blog.ratesttogo.com
Investors are willing to pay record prices for NYC hotels. Of course, the economy is recovering – although not at a quick pace. Yet economic improvements are occurring at a slow and consistent rate.
According to research firm Real Capital Analytics Inc., hotel prices rose to almost $185,000 per room during the first quarter of 2011. Five years ago, values were at a peak - $153,000 a room – but dropped 37% in 2008. Current record prices being paid by investors for U.S. hotels, however, might be outpacing gains in room rates and stays.
Increased Transactions
No doubt, this year's price increases are due to the rise in upscale hotel transactions as well as other purchases by real estate investment trusts (REITs) - especially in urban centers. At present, occupancy and room rates continue to climb – although the gains do not match the current prices for several full-service hotels.
Improved Fundamentals
Fundamentals are showing improvement. On the average, asset prices have affected fundamentals. Yet the current economy is not in 'peak' mode but the market is doing well under the present economic circumstances. Industry experts would prefer, however, a quicker pace of economic recovery.
New York City Hotel Prices
During September 2010, The Hilton Garden Inn Chelsea in New York City sold for $68.4 million. Three years earlier, this hotel had been listed at $55 million. The 2010 purchase price was 24% higher than in 2007.
In fact, values have even risen in smaller markets outside key centers. At the recent New York International Hospitality Industry Investment Conference, Barry Sternlicht, founder of real estate investor Starwood Property Trust Inc., explained, "Pricing is pretty aggressive. Even for generic hotels you get 20, 30 bids.”
In April 2011, FelCor Lodging Trust Inc. agreed to buy the NYC boutique hotels – Morgans and Royalton - from Morgans Hotel Group Co. for $140 million (almost $500,000 per room). Texas-based FelCor looks for hotels that "purchased at a substantial discount to replacement cost, will earn a 10 percent cash yield within a short time."
Real Statistics
According to Real Capital, daily room rates averaged $94.05 during 2010. Revenue per available room (RevPAR) was $42.40 – below the 2008 peak of $106.65 and $54.42. RevPAR is an industry measure of occupancy and rate.
Rising Sales
Towards the beginning of 2011, Jones Lang LaSalle Inc.’s hotel investment-services unit predicted that hotel sales could increase up to 25% this year. Due to the extraordinary demand from REITs (over $1.6 billion in hotels bought in first quarter), values have risen these past few months. The recent REIT statistics reflect 44% of trades and five times the total of REIT purchases during 2007 – a peak year for hotel investment.
REITs
REITs have their sights on full-service properties in urban centers. This week, Pebblebrook Hotel Trust agreed to buy stakes in six New York boutique hotels for $152 million. Pebblebrook is proceeding with this arrangement as part of a joint venture with Denihan Hospitality Group.
Occupancy Rates
Within the top 25 U.S. markets, occupancies rose to 63% in the first 2011 quarter. According to Smith Travel Research Inc., occupancies came in at 60% during 2010. Stays at expensive hotels have increased to 67% - up 4% from last year.
Replacement Costs
In a few instances, hotel values are higher than replacement costs. The high values might indicate more new hotels in the near future. In New York City, hotels trade regularly at $200,000 a room over the cost of replacement. Hotel demand is tied to the general state of the economy.
Potential Growth
Many hotel buyers believe that high prices are warranted if there is potential for future growth. As well, investors tend to be pleased with prices if lower than the cost required to build the property at that location.
Hotel Investors Inflate Property Prices Past Demand for Lodging
Image courtesy of blog.ratesttogo.com
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