N.Y. Hotels See Decline In Int'l Biz, Remain Optimistic

The strong U.S. dollar, weakened U.S. business climate and a bevy of sagging international currencies are key factors behind the current dip in international traffic at leading New York City hotels.

That's the word from sales and marketing directors who agreed that these are the prime reasons behind the current decline in New York City occupancies and—in some cases—rates.

At the upscale, 177-room Mark Hotel, director of marketing Bill Dunphy, said, "business still has to be done when required. But for vacationing CEOs or other top earners, visiting our property might cost them double what they'd pay at similar quality properties in their own country."

Therefore, this may be the year in which many travelers will go elsewhere, returning to New York when they once again can enjoy a currency advantage.

Michael Silberstein, managing director of The Palace Hotel, expressed similar tidings: "We certainly have seen corporate overseas business decline in line with the slower U.S. economy."

At the trendy, 193-room The Time hotel located in Manhattan's theater district, general manager Deborah Lewis noted that while there has been a general fall-off in international bookings, "The good news is that our biggest European feeder market is the United Kingdom, which has not been affected as badly. That compares with Germany, Scandinavia and Italy where we definitely have lost significant business."

Lewis also said she's optimistic about business this fall, noting that her July volumes were just 1.1 percent off from last year's record totals. She added, "Hopefully, the worst is behind us."

At the Empire Hotel Group, which operates eight properties in Manhattan and will open a ninth next year, "international business is off big time, around 30 percent. No one, including us, is making their international projections," said general manager Glenn Isaacs. "But, whether it's the strong dollar or other cause, we've redoubled our domestic sales efforts and chose not to increase rates this year. As a result of our proactive efforts, we're currently doing O.K."

For Brian Honan, director of marketing for Four Seasons Hotels, "it's all about choice. While business travel is time-specific, often it can be consolidated. We see Europeans who recently came here on a monthly basis, now visiting once each quarter. Clearly, this strategy lets them conserve travel funds."

As for leisure travelers to his contemporary 57th Street Four Seasons and Old World-stylish Pierre at Fifth Avenue and 61st Street, Honan said many U.S.-based travelers are flying right over the Big Apple, en route to relatively inexpensive European shopping.

"Everyone I know this summer went to France, returning with suitcases full of 'bargain-priced' Gucci loafers and Hermes scarves," he said.

To cope with his hotel's international patronage decline, Michael Lyman, director of sales and marketing at the Metropolitan Hotel, said, "We've turned to a greater spread of distribution choices, such as TravelScape, the international booking system that's part of Expedia, and the Hotel Reservations network. We give each a negotiated rate that the sites then mark up in order to make their profit. This helps us fill rooms that are no longer in such hot demand and can prove a real cost-savings alternative for both business and leisure travelers."

Hiro Kosugi, director of international sales for the New York City Marriott Hotels International—a territory that covers 6,200 rooms in nine Marriott-branded NYC properties—said that in such countries as Japan, the weakened currency plus the strong U.S. dollar has had a significant dampening effect on travel to the United States.

"But in Germany," he said, "many are opting to travel within the European Union or to Southeast Asian resorts or destinations. For Marriott in New York, we have seen German-based business decline 20 percent in month-to-month comparisons between this year and last."

John Fox, senior vice president in charge of the New York office of PKF Consulting, said New York City occupancies for the first-half of 2001 were 76.1 percent, far from the poorhouse when matched against historic standards, but a noteworthy dip when matched against 2000's first-half sum of 84 percent occupancy.

Fox said half of that decline is attributable to the arrival of new supply, adding that he would not be surprised to see the situation continue through year-end.

He also noted that while average New York City daily room rates were $216.69, 2.2 percent below 2000's first half, this year's rates still were significantly above the first-half 1999 levels of $205.05. The arrival of 3,800 new hotel rooms, which will have come into the market between January 2000 and December 2001, should not be underestimated, Fox said.

Adding a dash of perspective to these numbers, Fox concurred with several other industry executives, noting that beginning with the upcoming fourth quarter date-to-date comparisons will cease to appear so stark since the "down period"—if that is what really is happening—first started grabbing attention last fall. As for more distant timeframes, Fox and PKF estimated that the city's 2001 final numbers will register an annual occupancy rate in the 78 percent to 79 percent range.

However, Roger Connor, a Marriott International vice president, said much will depend on whether the current soft economy—which created less business travel, fewer meetings and conventions—continues.

Optimism still reigns at the desks of Mayor Rudolph Giuliani and NYC & Co., the firm that serves as the city's convention and visitors bureau. They are standing by expectations of 37.6 million visitors this year, representing a 0.5 percent gain over 2000's totals.

Last year those sums pushed New York City into third place among most popular destinations for U.S. travelers. During 2000, only Orlando and Las Vegas outdrew the Big Apple.

Also, whatever the final numbers, total travel to New York City is a huge income provider. Last year visitors spent an estimated $17 billion in hotels, restaurants and stores. Furthermore, according to NYC & Co., total economic impact of tourism to New York City was an estimated $24.9 billion last year, which supported a projected 281,900 tourism jobs.

As for the leading sources of New York City-bound international travel—which NYC & Co. estimated at 6.8 million for 2000—the United Kingdom led the way with 1.1 million, followed by Canada (920,000), Germany (461,000), Japan (410,000), France (341,000), Italy (244,000) and Brazil (183,000).

Though it never disappeared, Harlem once again is being rediscovered, this time by travelers seeking moderately priced accommodations, usually offering significantly greater space than that available in midtown.

Long patronized by international travelers and youthful bargain-seeking adventurers, a number of options now are available for business people with appointments in Harlem, at Columbia University or Barnard College—or virtually anywhere in uptown Manhattan. Undoubtedly aided by publicity generated by the arrival of former President Clinton at his new 125th Street offices, the fact is that travelers whose business is far above midtown, now have a more convenient sector to consider when picking a hotel.

For example, there is the three-year-old Urban Gem Guest House housed in an 1878 brownstone at Fifth Avenue between 120th and 121st streets, just north of Mount Morris Park. "We offer a bed and breakfast setting featuring all the amenities of business travel, plus all the comforts of home," said owner Jane Mendelson.

Columbia students, scholars and alumni, business travelers and jazz fans steadily occupy the property, she said. Guests enjoy rooms with private baths and kitchens, queen-size beds, cable television and in-room phones that also offer direct lines for laptops. The site is nearby to express downtown-bound subways, the 125th Street Metro North rail stop two blocks east, the M60 city bus that transports guests to and from New York La Guardia airport for a $1.50 fare.

Single room rates range from $90 to $200. More information can be obtained by logging on to www.urbanjem.com.

Another choice is the Park View Hotel at 55 Central Park North, also known as110th Street, with single rates ranging between $60 and $70. The property's three dozen Spartan single or double rooms are accessed via a funky lobby, and the property features direct access to the West Side 2/3 express trains, which take 10 minutes to reach Times Square.

According to a spokesperson for the Upper Manhattan Empowerment Zone, there are many more hotels on the planning board. These include a yet-to-be-named boutique hotel on revitalized 125th Street, and two major hotel chains are reported to be exploring—and possibly vying—to be the first to open a major brand property in the heart of Harlem.

In other hotel news, a major redecoration of all 1,300 rooms at the Milford Plaza on West 45th Street, is well underway. The rooms will feature new furniture, beds, carpeting, wall covers, televisions and light fixtures.

On Long Island, Apple Core Hotels has converted the former Best Western Hotel & Conference Center into the 182-room Quality Hotel & Conference Center featuring 16,000 square feet of meeting space, which it claims makes it Long Island's largest hotel conference facility.

And, looking toward next January, the 145-all-suite Inn at Fox Hollow in Woodbury will make its debut. The property is situated on an eight-acre campus, some 30 miles east of Manhattan. The Long Island facility will offer five meeting rooms and an executive boardroom complete with full audiovisual and telecommunications capabilities.