5:48PM EST November 13. 2012 – Two weeks after superstorm Sandy delivered a knockout punch to much of Manhattan below 39th Street, most hotels are open and busy again.
But some on the city’s lower tip are still closed, and may not be back up for weeks.
“Outside a few isolated hotels, New York is open for business,” says consultant Scott Berman, who leads PricewaterhouseCoopers’ hospitality practice. Tuesday night, The 1,957-room Marriott Marquis — the city’s largest hotel — was sold out.
Marriott spokeswoman Kathy Duffy says most of Marriott’s 14 New York-area lodgings “are running high-occupancy this week.”
Most of the city’s hotels didn’t suffer extensive storm damage. But many lost electricity, heat, phone lines and other basics, which made operating or reopening complicated, hoteliers say. The city’s tourism arm, NYC Company, estimates that about 30 of its member hotels had to shutter temporarily due to Sandy.
Tuesday, hotels still closed included:
- The Best Western Plus Seaport Inn in the South Street Seaport area, which had flooding on the ground floor. Damage still is being assessed, and no reopening date is yet set.
- The 128-room Wyndham Garden Inn Long Island City, which just opened this spring, suffered extensive water damage to its basement and power systems. Target reopening date is late December.
- The Holiday Inn Express New York City- Wall Street remains closed, while its sister Holiday Inn New York-SoHo reopened, but at limited capacity due to phone outages.
- The World Center Hotel by the 9/11 Memorial is still closed due to flooding.
But in a sign of recovery in Lower Manhattan, 298-room The Ritz-Carlton New York, Battery Park — one of the area’s last large, full-service hotels that had closed in advance of Sandy —- reopened to eager customers Monday.
Other hotels that have reopened include the 500-room New York Marriott Downtown, which was not offering restaurant or in-room dining as of Tuesday. The Wi-Fi wasn’t working and the concierge lounge was closed but scheduled to reopen Wednesday. Guests were being offered complimentary coffee and muffins in the lobby each morning.
The 217-room W Downtown hotel reopened on Friday, along with its BLT Bar Grill and its lobby lounge.
RELATED: Reopening a luxury hotel takes time
Hospitality industry trackers are still tallying how much damage Sandy caused to the hotel industry — specifically, New York hotels, which typically fill about 80%-85% of rooms — among the highest occupancy rates in the USA.
Sandy’s financial toll
The damage from Sandy is expected to be significant enough that hotel owner Pebblebrook Hotel Trust Monday lowered its financial projections for the year, citing the impact of Sandy and last week’s Nor’easter storm. The publicly-traded real estate trust owns 25 hotels, including 19 wholly owned hotels with a total of 4,615 guest rooms, plus a 49% joint-venture interest in six hotels in New York City, including the Affinia Manhattan and The Benjamin.
“The negative impact on our business was felt at our hotels throughout the United States as cancellations, no-shows and limited new bookings combined to produce enough lost revenue and additional expenses to warrant this revision to our outlook,” Pebblebrook CEO Jon Bortz said in a statement.
Sandy ravaged New York in “the absolute peak quarter of the year,” when business travel and events ramp up and then make way for tourists in November and December, says John Fox, hotel industry consultant at PKF Hospitality.
But, he says, “the jury’s really out what the Sandy aftermath is going to be. There are half-full and half-empty issues.”
On the glass-half-full side: Most hotels aren’t hurting for business right now.
When the Andaz Wall Street opened Sunday, general manager Jeffrey Miller said it had “huge gaps of vacancy.” But demand gushed back, just as the flood waters had swept into the hotel’s basement, destroying its spa, meeting space and gym.
“By Sunday night, we’d sold out the next three weeks,” Miller says.
Business bounces back
The Ritz-Carlton New York, Battery Park, which suffered water damage in non-public basement rooms, had a similar response from customers.
“As soon as we announced that we were going to open on Monday, the phones started ringing,” says Nicole La Valette, the hotel’s director of sales and marketing.
At Midtown’s Sheraton New York —- the city’s third-largest hotel, which never lost power —- demand “has bounced remarkably, even after the 1-2 punch of the hurricane and then the snowstorm. Our meetings and conventions business is back to pre-hurricane levels,” says general manager Mark Sanders. The hotel also is seeing holiday bookings that at this point are stronger than 2011, he says.
“We’re booked solid at the end of November and through the first few weeks of December,” Sanders says. “People are generally optimistic about the economy improving over last year. And, the strength of New York City and its ability to draw travelers from far and wide has helped contribute to this strong upcoming holiday season.”
A new kind of customer
The glass-half-full side: Hotels accustomed to checking in higher-paying business travelers with hefty expense accounts are instead checking in government, utility and rescue workers who travel on per-diem expense accounts and stay at lower rates, says PricewaterhouseCooper’s Berman.
Partly due to that shift in customer profile, PricewaterhouseCoopers Monday released an updated lodging forecast that calls for slower growth in revenue per available room (a standard industry financial measure) in 2012 and 2013.
“Our clients are telling us that it’s business as usual, at least in terms of occupancy,” Berman says. “Obviously, it’s a different type of demand and there’s no doubt that the week of the storm there was significant displacement. Corporate guests were displaced by storm refugees.”
Catered events for full-service hotels “took a big hit,” Berman says, noting that for some hotels, food and beverage can account for as much as 50% of revenue.
The Andaz’s Miller says that his hotel’s restaurant —- and others in Lower Manhattan —- expect to lose revenue even if hotel rooms fill with recovery workers and residents forced from their homes. “The restaurant sector’s a challenge for all of us,” he says. “We’re used to used to a more tourist type of business, where the spend’s a little higher.”
Still, Manhattan looks to get a gift in the form of its big Thanksgiving-Christmas season for tourists.
With most hotels intact, “I would encourage travelers to keep their plans for the holidays,” Berman says.
