New Jersey's Proximity Attractive To N.Y. Biz Travelers
When the 350-room upscale Hyatt Regency Jersey City opens in July, it will be the latest evidence that New Jersey hotels in easy reach of Manhattan play an integral part in the complicated New York lodging picture. Recent openings in these communities range from a 115-room midprice Hilton Garden Inn in Secaucus, which opened in April, to two extended stay properties—a 128-suite Residence Inn by Marriott in West Orange and a 149-room Extended Stay America in Elizabeth—which opened in March and April, respectively.
N.J. Suitable For Both Markets
What the four have in common is their dual market reach. On the one hand, they draw business travelers from the New Jersey towns in and around where they are located. Certainly, Jersey City has grown in the past few years into a significant business center in its own right (BTN, Nov. 12, 2001). On the other hand, they are dependent on their proximity to Manhattan for a large part of their appeal to business travelers.
Ironically, the current economic downturn has proven a mixed blessing for properties in close-in New Jersey suburbs. Before the effects of the recession were felt, these properties, particularly at the midprice tier, offered buyers a real cost-effective alternative to equivalent properties in Manhattan. Travelers would stay in New Jersey and then either drive or take mass transit the short distance into the city. With more business travelers today driving to their destination instead of flying, New Jersey hotels also have an advantage because they are more likely to provide plenty of complimentary or at least low-cost onsite parking, a rarity in the city.
However, with the recession, compounded by the effects of Sept. 11, many of New Jersey's cost advantages disappeared as Manhattan properties at all price points responded by reducing rates, in some cases drastically, to stimulate demand.
Today, buyers who bring a lot of room nights to New York may want to add New Jersey hotels to their programs to supplement, rather than replace, the Manhattan options. This gives travelers the choice of where to book, most likely based on their budget.
Little data exist on how hotels specifically in these close-in New Jersey communities have fared during the economic downturn. Occupancy rates in New Jersey as a whole, which would include the Princeton and Cherry Hill markets, were down 5.3 percent in March, compared with March 2001, according to Smith Travel Research. This is comparable to the 5.2 percent drop in occupancy experienced by New York City hotels for the month. Average room rates in March for New Jersey, meanwhile, fell 7.2 percent over the prior year, compared with the 13.4 percent drop recorded for the month in New York City, suggesting that New York hotels were prepared to slash rates to a greater degree than their suburban counterparts to spur demand and get people booking.
The new Hyatt Regency Jersey City will be located on a pier, jutting into the Hudson River, that's part of a new mixed-use office development called Harborside Financial Center directly across from Wall Street. Manhattan can be reached by either a short ride on the PATH subway or via ferry. "Jersey City's popularity as a location for business continues to increase and, correspondingly, so will the city's attraction to business travelers," said Hyatt president Scott Miller.
Like Hyatt Hotels overall, the new property offers business travelers a full-service experience from restaurants and bars with Manhattan views to substantial, Internet-friendly meeting space.
The Hilton Garden Inn is located on Route 3 with easy access to midtown Manhattan through the Lincoln Tunnel. "We're growing the Hilton Garden Inn brand very quickly and the Secaucus property's suburban/ highway location is typical of the brand," said Adrian Kurre, senior vice president of brand management. "For the business traveler to New York who's on a budget, it's an opportunity to be near the city without actually staying in it. This means we're able to provide a higher level of service and amenities than a traveler would normally expect to find at a mid-market price point." Standard amenities include a 24-hour business center, onsite restaurant and a fitness center with a swimming pool.
In the extended stay segment, Residence Inn by Marriott is on the upscale end of the spectrum, while Extended Stay America has built its reputation as more of an economy brand. The underlying business model, however, is the same: Travelers staying five nights or longer typically are on a training or consulting assignment or in the midst of relocating. In many instances, guests stay for months at a time.
"Accordingly, they want accommodations with more of a residential feel since the hotel substitutes as a home away from home," said Tim Sheldon, Marriott senior vice president for extended stay lodging. Sheldon added that the Residence Inn's West Orange location is easily accessible to Newark International Airport as well as New York.
Given that extended stay travelers often press their guest rooms into use as temporary offices, rooms at the Extended Stay America in Elizabeth—one of the brand's Efficiency Studios prototype—include dataports, voicemail and complimentary local calls. "Considering that guests are likely to be on a budget, rooms also come with a complete kitchen, which allows them to prepare their own meals, rather than going out," said Mike Wilson, vice president of marketing.
Even though the bulk of their business is extended stay, these properties will book transient stays, pending availability.