The Ritz-Carlton in New York’s NoMad neighborhood.
Seema Mody | CNBC
Marriott will open a swanky new Ritz Carlton hotel in Manhattan next week, marking a bet on the rise of luxury travel and the hopeful return of business travelers this fall.
“It has 10,000 square feet of meeting space, a 7,000 square foot spa, and four dining outlets. I think it’s uniquely positioned to support this leisure travel hub. business travel,” Marriott CEO Tony Capuano told CNBC. tuesday.
The debut of the 108th Ritz Carlton comes as New York is experiencing an upsurge in tourists. The city saw tourism dry up at the start of the pandemic when New York City became one of the outbreak’s early epicenters. Now travelers are flocking in and more and more developers are signing new deals.
“2019 was the best year in New York’s history. You had over 66 million visitors to New York. There’s a feeling we’re going to get back to about 85% of that this year,” Capuano said.
New York’s hotel occupancy rate is currently the third highest in the country, at 83%, according to STR, a hotel analytics provider. The top two markets are Portland, Maine and San Diego, California with occupancy levels of 85% and 84%, respectively.
New York’s rebound marks a strong reversal from the past two years, when beach destinations prevailed.
“People just stayed away from city centres. They didn’t want to be around a lot of other people because of Covid…but that’s reversed and I think we’re ready for city breaks” , said Jan Frietag, country manager of the Costar group. director of hotel analysis.
As hotel demand rebounds and inflation hits its highest level in four decades, prices per night have soared. The average cost of checking into a hotel in New York is nearly $300 per night, up 20% from 2019 levels, according to STR.
Capuano said the higher rates are a sign that hotels have pricing power — as long as they can navigate a tough labor market.
“I think it’s sustainable if we provide this service. Obviously one of the big challenges facing the entire travel and tourism industry is a workforce challenge. We continue to do everything what’s in our power to make sure our hotels are staffed, our teams are trained, and if we’re going to continue to take advantage of this strong pricing power, we need to deliver service,” Capuano said.
The Ritz Carlton joins 11 other hotels that opened in New York this year. Another 60 projects are in the works with opening dates set for 2022, according to STR.
“It’s the highest pipeline in the country for any market,” Freitag said.
But hotel development continues to be slowed by supply chain delays. The Ritz Carlton opened four years ago and is only opening now, in part due to the pandemic and ongoing supply constraints that have slowed construction.
“It’s really difficult to open when you want to open because of the ongoing challenges with supply chain issues,” Freitag said.