The Ritz-Carlton in the NoMad area of New York City.
Seema Mody | CNBC
Marriott next week will open a great new Ritz Carlton hotel in Manhattan, marking a bet on the rise in 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 food and beverage outlets. I think it’s uniquely positioned to take care of that turning point from leisure to business travel,” Marriott boss Tony Capuano told CNBC on Tuesday. .
The debut of the 108th Ritz Carlton comes as New York City sees a resurgence of tourists. The city saw tourism almost dry up in the early days of the pandemic when New York became one of the first epicenters for the eruption. Now travelers are pouring back, 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 sense that we’re going back to about 85% of that this year,” Capuano said.
The hotel occupancy rate in New York City is currently the country’s third strongest, at 83%, according to STR, a provider of hospitality analysis. The top two markets are Portland, Maine and San Diego, California, with 85% and 84% occupancy, respectively.
New York’s rebound marks a strong reversal from the last two years when beach destinations won.
“People stayed away from downtown areas. They did not want to be around many other people because of Covid … but that has changed and I think we are ready for the city break,” said Jan Frietag, a Costar Group citizen. Director of Hospitality Analysis.
As hotel demand picks up again and inflation is at a level of four decades, prices per night have skyrocketed. The average cost of checking into a hotel in New York City is nearly $ 300 per night, up 20% from 2019 levels, according to STR.
Capuano said the higher prices are a sign that hotels have pricing – as long as they can navigate a challenging job market.
“I think it is sustainable if we provide that service. It is clear that one of the major challenges facing the entire tourism and tourism sector is a work challenge. We continue to do everything in our power to ensure that our hotels are “staffed, our teams are trained. If we are to continue to experience this strong pricing power, we must deliver on service,” said Capuano.
The Ritz Carlton merges with 11 other hotels that have opened in New York this year. Another 60 projects are in the pipeline with planned opening dates for 2022, according to STR.
“It is the highest pipeline in the country for any market,” Freitag said.
But hotel development continues to be stumbled upon by delays in the supply chain. The Ritz Carlton broke ground four years ago and is only now opening its doors, in part due to the pandemic and ongoing supply constraints that slowed construction.
“It is very difficult to open when you want to open because of the ongoing challenges associated with supply chain problems,” Freitag said.