Can NYC’s aging hotel boom find new life? December 1, 2016

The Real Deal | 12/1/2016

Even as tourists and business travelers flock to New York City in growing numbers, hotel operators face two looming threats — the dollar’s strength and a wave of new industry capacity. With 16,461 rooms under construction, per industry tracker STR, room rates could soon come under pressure, and some projects could get shelved. But in the longer term, as the city’s population heads toward 9 million, the adage “if you build it, they will come” should hold true, said Jan Freitag, STR’s senior vice president of lodging insight. Meanwhile, the industry recently logged what some hail as an important victory in Albany over Airbnb. As per a law signed in October, people who advertise rentals for less than 30 days in multi-unit buildings could face fines of up to $7,500. Michael Barnello, chief executive of LaSalle Hotel Properties, told investors he sees the move as “a big [shot] in the arm for the hotel business, certainly in terms of the pricing.” Others are more dismissive of Airbnb. “It’s like a pimple on an elephant’s behind,” said Allen Gross, chief executive of GFI Capital Resources Group, owners of hotels including the Ace in Chelsea and the Beekman downtown. For more on developments in the market and on the latest shifts in the hospitality business model, we turn to the experts.

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