Dive Brief:
- New York leads all other top 50 U.S. markets with the greatest number of hotels presently under construction, totaling 47 projects, or 7,655 rooms, according to Lodging Econometrics.
- In the first quarter of this year, New York added 12 hotels to its construction pipeline, outpacing all other markets with the highest number of new hotel projects, Lodging Econometrics found. As for its total hotel construction pipeline, New York ranked 10th among other top markets for the largest pipeline in Q1.
- The market saw significant hotel conversion activity in the first quarter, tracking with other major markets as conversions continue to be a desirable option for developers. Based on current pacing, Lodging Econometrics predicts New York will lead the nation in hotel openings as the year progresses.
Dive Insight:
The New York submarkets with the most projects presently underway include what Lodging Econometrics calls “the New York City area,” which comprises Brooklyn East, the Bronx and Staten Island with 16 projects, or 1,261 rooms; Midtown South with seven projects, or 1,515 rooms; and the John F. Kennedy International Airport/Jamaica area with seven projects, or 851 rooms.
The submarkets with the highest total hotel construction pipelines in Q1 were the New York City area with 25 projects, or 2,096 rooms; the Midtown South area with 11 projects, or 2,535 rooms; and the Midtown West/Times Square area with 10 projects, or 4,131 rooms.
The Times Square neighborhood, in particular, has seen significant hotel activity in the last year, including acquisitions and openings.
Of the hotel projects in New York’s Q1 pipeline, a “noteworthy amount” were for conversions and renovations, according to Lodging Econometrics.
In the quarter, New York ranked as the third largest market in the U.S. for renovation and conversion projects, with a combined total of 30 projects, or 8,020 rooms, in the pipeline.
Other major markets saw significant conversion activity in the quarter, according to Lodging Econometrics. Los Angeles had the largest count of combined renovation and conversion projects in its total hotel construction pipeline, representing 31 projects, or 4,857 rooms.
And while Chicago had the same amount of conversion and renovation projects in the pipeline as New York, its rooms count for the category was slightly higher, at 8,128. Atlanta followed New York, also with 30 combined renovation and conversion projects, but totaling only 3,488 rooms.
At the beginning of the year, Lodging Econometrics SVP Bruce Ford told Hotel Dive that hotel conversions will remain one of the fastest ways to grow portfolio scale until the hotel construction financing environment loosens, possibly in the second half of this year.
New York ranked seventh among the top markets for the number of newly opened hotels in the first quarter, Lodging Econometrics found. Looking ahead, the company forecasts that New York will lead all other markets for openings for the remainder of the year, ending 2024 with 26 projects, or 2,910 rooms, open.
In October, Warren Marr, hospitality and leisure managing director at PwC US, cautioned against reading too much into recent development successes in New York City. He told Hotel Dive that while many hotels have recently opened in the city, many have closed, including the formerly successful Hudson Hotel and Stewart Hotel.