Politic Say: Dozens of NYC hotels in jeopardy as international tourism set to return

By CYNTHIA LOPEZ

November 16, 2021

 

Tourists are poised to swarm to the Big Apple during the holiday season after an international travel ban was lifted last week — but it might be too little, too late for dozens of New York City hotels.

 

The pandemic has already felled a number of famous properties including the landmark Roosevelt Hotel near Grand Central Terminal, the Excelsior Hotel on the Upper West Side and the century-old Hotel Pennsylvania across from Madison Square Garden, which now faces the wrecking ball. 

 

More than 30 other hotels, mostly smaller ones that haven’t yet reopened, are at risk of being sold or going dark for good, The Post has learned. The list, tallied by GAM Hospitality Advisors, includes swanky boutiques like The Hudson — the chic Midtown venue launched by Ian Schrager in 2000 — as well as the Paramount, Avalon and Roger hotels.

 

“The burdens that have been put on them by the lack of tourism over the last 20 months and by the city and the labor union, will likely result in their permanent closure,” said GAM Hospitality president Geoffrey Mills. 

 

The websites of the Roger and Paramount hotels both say they’re set to reopen in spring of next year despite being on GAM’s list of hotels that are at risk of closing. The Hudson and Avalon, meanwhile, remain closed and haven’t communicated any reopening plans. The Roger, Paramount and Avalon didn’t immediately respond for comment. The Hudson couldn’t be reached for comment.

 

While tourists are coming back in force, filling up many hotels over the weekend, business travelers are largely missing, leaving gaping holes on their balance sheets. On Wednesday, the occupancy rate was just 63 percent, compared with the “low 90s” on the same Wednesday in 2019, according to Jan Freitag, National Director of Hospitality Analytics for CoStar Group.  

 

The massive Jacob K. Javits Convention Center began hosting meetings and trade shows in August, but the events are smaller, attracting fewer attendees, and the calendar for 2022 has been slow to fill up. About 17 shows are listed on the 2022 calendar compared with the 175 shows a year the convention center normally books. 

 

“The calendar is fluid and changes daily,” Javits spokesman Tony Sclafani told The Post.

 

The city’s tourism bureau, NYC & Company, doesn’t expect business travel to fully recover until 2025, spokesman Chris Heywood said. 

 

Some large hotels that had closed last year recently reopened to catch the wave of holiday tourists as Broadway and the borders reopened — but also to avoid incurring hefty severance payments to furloughed hotel workers, industry experts said. 

 

In October, Mayor de Blasio signed legislation requiring closed hotels to pay laid-off employees $500 a week starting on Nov. 1 for at least six months if the hotel has more than 100 rooms and laid off more than 75 percent of its employees during the pandemic. 

 

In addition to reopening at the start of the month, the hotels avoided the payments by hiring back 25 percent of their staff. 

 

The Hotel Association of New York City sued the city over the law last month, arguing that it is battering an industry that has already suffered great losses.

 

The New York Hotel and Gaming Trades Council, meanwhile, says that just under half of its members are still laid off from their hotel jobs. 

 

“The [hotel] unemployment rate remains significantly higher than almost any other occupation,” Trades Council President Rich Maroko told The Post, defending the severance policy.

 

Since the law was announced, the New York Hilton Midtown — the city’s largest hotel, with 1,878 rooms — reopened in October. The Hyatt Grand Central New York reopened on Nov. 1, as did Omni Berkshire Place, which had announced its closure earlier this year.

 

But these large hotels are not opening all of their rooms, because the demand is simply not there.

 

One of the city’s five biggest hotels, for example, is “maintaining an artificially low occupancy level as a labor management tool, because it’s presently not able to hire and train all the employees to open fully,” according to Sean Hennessey, president of Lodging Advisors and a New York University professor of hospitality. Hennessey declined to name the hotel.

 

Still, the Langham on Fifth Avenue was jubilant as 35 international travelers arrived in its lobby last Monday, the first day they were allowed to come to the US. The guests filled up 10 percent of the property’s rooms, according to a spokeswoman. Meanwhile, the two Fitzpatrick hotels in Midtown Manhattan, which draw a lot of travelers from Ireland, are counting on occupancy rates between 90 percent and 100 percent during the first two weekends in December, according to owner John Fitzpatrick. 

 

Nevertheless, the hotelier isn’t predicting that either of his two properties will be “back to normal” next year, or even in 2023.

 

“If the big hotels don’t fill up, then the other hotels don’t fill up either,” Fitzpatrick said.