This year is shaping up to be a healthy one for the U.S. hotel industry, with more 33,000 new rooms planned in the top 10 most active markets.
According to industry research firm Lodging Econometrics, the top market by far is New York City, with an estimated 8,612 new rooms in the pipeline for 2017.
“The rooms opening in these markets will be the first wave of new hotel supply in a healthy hotel market for owners,” says Bruce Ford, senior vice president of development at Lodging Econometrics.
CBRE Hotels’ America’s Research, which tracks the industry, also puts New York City at the top of the market with a 6.4% increase over last year, the largest increase of any region.
Both firms named these other cities among the most active markets in the USA: Houston, Dallas, Chicago, and Los Angeles.
Lodging Econometrics also pointed to Charlotte, Denver, Seattle, Austin, and Tampa as healthy places for hotel development.
CBRE is also seeing a notable percentage growth in room supply in Washington, D.C., Orlando, Atlanta, Phoenix, and San Diego. The U.S. average percentage growth in supply is estimated at 1.8%, according to CBRE.
New York City will see a big increase in a category called select-service hotels. These properties typically offer similar in-room amenities to full-service hotels but have fewer meeting spaces and restaurants. They are popular with hotel owners because they are cheaper to build and run, and they are popular with travelers because they are more reasonably priced yet still offer amenities.
“This is an urban center trend that is spreading throughout the world,” Ford says.
Fred Dixon, president and CEO of NYC & Company, the official destination marketing organization, says the city is on track to receive a record 60.3 million visitors in 2016.
“For hotels, it has meant a steady increase in hotel room nights sold—the key metric of demand—among our 111,000 rooms, which has also supported ongoing investments in new developments,” he says.
Among some notable Manhattan projects are: a 315-room CitizenM Hotel in Lower Manhattan, a 14-room Restoration Hardware Hotel by the furniture store in the Meatpacking District, and the 190-room SLS Hotel New York designed by Philippe Starck. It will be a busy year for SLS, as it is also slated to open this summer in Seattle with 184 rooms and views of Elliott Bay.
Boutique hotel guru Ian Schrager will open the 370-room Public in the Lower East Side. In collaboration with Marriott International, he will also debut his second EDITION hotel in New York, a 450-room property in midtown.
Marriott will bring to Manhattan one of its newest brands, the 266-room AC Hotel by Marriott, in the Financial District. Marriott will also introduce its Moxy brand to New York City with a 612-room property near Pennsylvania Station.
Manhattan is not the only borough getting new hotels. A wave of activity is happening in Brooklyn, with the second eco-friendly 1 Hotel in the city coming to Brooklyn Bridge Park. The Pod Hotel Brooklyn will open in Williamsburg.
Queens is getting a 108-room Hyatt Place in Long Island City. And Aloft will open at New York LaGuardia Airport. The Bronx will get a 62-room Holiday Inn Express.
Late in the year, Staten Island will have a new 190-room hotel that has yet to be named. The north shore of Staten Island will soon have the New York Wheel, which is projected to be the world’s tallest Ferris Wheel, plus a shopping mall and residences.
“In 2017, we are seeing new properties and new locations developing across new neighborhoods in every borough at every price point,” Dixon says.
The largest hotel opening in 2017 is projected to be the 1,200-room Marriott Marquis at McCormick Place in Chicago.
According to CBRE, Chicago is slated to get 2,142 new rooms this year.
In addition to the Marriott Marquis, Chicago will get a new trendy ACE Hotel in the Fulton Market District, a luxury Viceroy hotel in the Gold Coast, and a Nobu Hotel, co-owned by actor Robert De Niro.
The city will also welcome EMC2, part of the Marriott Autograph Collection. Kimpton Hotels and Restaurants’ former Hotel Burnham will be rebranded to The Alise Chicago, a StayPineapple Hotel.
Los Angeles has some notable openings as well, many with rooftop pools or bars. Downtown L.A. has in recent years become a hot spot for new hotels to accommodate convention activity and events at L.A. LIVE and the Staples Center.
This year, the InterContinental Los Angeles Downtown will become part of the tallest U.S. building west of the Mississippi River when the Wilshire Grand Center opens. The $1.1 billion project is being developed by Korean Air and the Hanjin Group. The hotel will have 900 rooms and a sky lobby on the 70th floor.
Another InterContinental Hotels Group brand, Hotel Indigo, will also debut downtown. China-based Greenland Group is developing Metropolis, a $1 billion mixed-use project located just east of the Harbor Freeway downtown. The 18-story, 350-room Hotel Indigo will be a part of that.
New York’s popular NoMad Hotel will spread to Downtown L.A.’s Giannini Place, which was built in 1923 as the headquarters for Bank of Italy. It will have 250 rooms and a rooftop pool.
Elsewhere in the city, celebrity chef Nobu Matsuhisa is taking over the old Casa Malibu and converting it into a ryokan, or a traditional Japanese inn. The beachfront property, owned by tech magnate Larry Ellison, will have 18 rooms.
Los Angeles will welcome its first Waldorf Astoria. The newly-built property in Beverly Hills will have 170 rooms.
In another first, Choice Hotels International’s upscale Cambria brand will enter the Los Angeles market with the opening of the 152- room Cambria El Segundo LAX.
Los Angeles will also have a new “poshtel” brand, or an upscale hostel. The Freehand, which has properties in Miami and Chicago, will open a 226-room property with a rooftop pool.
Ernest Wooden Jr., president and CEO of Los Angeles Tourism and Convention Board, says he expects 9,000 new hotel rooms to be added by the end of 2018. As room inventory has increased, it has almost immediately been absorbed because the demand is so great, he says.
“These hotel projects currently underway are critical to our long-term ability to attract both leisure and business travelers,” he says. “In particular, the additional inventory to Downtown L.A. will be critically important to our ability to attract larger citywide conventions.”
Houston will welcome 3,390 more rooms this year, according to Lodging Econometrics.
The city has undergone a $175 million renovation of its George R. Brown Convention Center.
“Houston is attracting new eyes from the meetings industry,” says A.J. Mistretta, director of public relations for Visit Houston. “In fact, (2015) saw a record 733,000 room nights booked for future conventions and 2016 is looking like another record year.”
And then there’s the Super Bowl, which Houston hosts in February.
“A number of hotel projects were planned for completion before the big game,” Mistretta says. “Still others slated for completion after February hope to take advantage of the increased exposure the destination should get out of the Super Bowl.”
Highly anticipated openings include the 223-room Hotel Alessandra downtown, the 150-room Hotel ZaZa in Memorial City, and the 225-room Le Meridien-Downtown, part of Starwood Hotels and Resorts.
Charlotte, N.C., has also been having a renaissance as a leisure and business travel destination that is driving developers to add 3,663 additional rooms and 22 hotels.
The city says that more than 8,367 new rooms are in construction or planning in the region through 2020, including 2,228 in Center City, where much development is taking place.
Kimpton plans two hotels there: the Kimpton Downtown Charlotte and the Kimpton Charlotte Dilworth/South End Hotel. The 216-room Kimpton Downtown Charlotte will have 9,175 square feet of meeting space, a restaurant, a fitness center and a 7,500-square-foot indoor/outdoor rooftop bar.
The 128-room Kimpton Charlotte Dilworth/South End Hotel will feature 4,500 square feet of meeting and event space, a restaurant, outdoor pool and bar, and a rooftop area with views of the skyline.
Marriott also plans to open an AC Hotel by Marriott Charlotte City Center Downtown, a 184-room European-style boutique property that is targeting younger travelers.
“Our Center City continues to grow in terms of office space, urban living options and transit enhancements,” says Laura White, director of communications for the Charlotte Regional Visitors Authority. “These additions, along with the strong concentration of existing restaurants, nightlife and attractions in a walkable footprint, are ensuring that Charlotte makes the short list for hotel developers.”
Nancy Trejos, USA TODAY