Operators Look to UN, Broadway and Holidays To Regain Momentum
Ordinarily, New York City hoteliers would be looking forward to their boom time of year: the United Nations is in town, theater and cultural life resume at full speed and the always busy holiday season.
While 2021 is clearly an improvement over 2020, uncertainty looms.
John Fitzpatrick, who owns namesake hotels on Manhattan’s East Side and near Grand Central Terminal, had consolidated operations at the Fitzpatrick Grand Central for most of the pandemic, closing the uptown location for an extended period. He reopened The Fitzpatrick Manhattan a couple of months ago and reports that while occupancy has improved to 70% to 75%, he is not getting pre-pandemic rates because of a lack of business travel.
While there are few cancellations yet, he is taking things day by day. If Broadway reopens as scheduled in mid-September, that would be a huge boost. Perhaps the biggest determinant for the fall will be whether international travel will resume.
He said his conversations with Europeans showed “they are chomping at the bit to come to New York.”
The Pierre General Manager Francois-Olivier Luiggi said occupancy reached 60% at a high rate in July, but occupancy now has sunk to about 50% while maintaining elevated rates. He attributed the high prices to the luxury property selling suites first and for longer periods. That might mean a family reunion or other big celebration or medical treatment with bookings for multiple suites. Rates are high in the upper-luxury segment because there are few corporate travelers paying negotiated rates.
One major drag, Luiggi said, is no one is in the mood for large events right now. He sees a lot of demand for small social events and even smaller conferences for organizations that derive their income from these conclaves. It remains to be seen whether major charity events this fall are canceled or will go hybrid which can be equally if not more expensive if production values are high.
One big question for Manhattan especially is whether the U.N. will have a live session as planned or if it will be partly virtual. That is a huge piece of the business for the city, which compresses rates significantly. Luiggi said in the past, a U.N. group needed to place a 50% deposit by July, but now that is not the case.
“We are not flexible on rate, but we are on terms,” he said.
Click here to read complete article at CoStar.