Mineola, New York: HVS, which operates the world’s most extensive hotel consulting and valuation practice, conducted a record number of hotel assignments out of its headquarters office in New York in 2014. HVS assignments in the New York City market grew by 24% over last year. Feasibility studies for new or ongoing hotel developments accounted for 42% of the firm’s more than 120 assignments in New York City in 2014.
“The continuation of hotel development in Manhattan illustrates the health of the hospitality industry in New York City,” said HVS CEO Stephen Rushmore. “What remains to be seen is whether market demand will continue to keep up with the unprecedented pipeline of new rooms.”
Historically, demand in Manhattan has grown faster than the rate of new hotel development, helping shield the city’s lodging market from the effects of economic fluctuations even as local room supply expands. Since 2009, supply in the market has increased 23% at an annual compounded rate of 4.2% per year. Demand grew 34% during the same period at a compounded rate of 6.0% per year. HVS expects hotel supply in the Manhattan market to increase by 4.1% in 2015, by 4.5% in 2016, and again by 6.5% in 2017.
Manhattan’s lodging market is in the midst of a more extended recovery period compared to those of past recessions. This recovery is aided by new developments and the wide scope of existing leisure, commercial, and meeting and group demand generators in the borough; the chief hindrance to an accelerated recovery is the amount of new supply and its negative impact on average rate in the market. RevPAR is expected to regain its pre-recession peak in early 2016, though the high rates of RevPAR growth in the market will likely become more gradual over the long term.
“Overall, while a full recovery of hotel performance in Manhattan has been more drawn out, the area’s fundamental strengths provide a solid foundation for growth over the long term, ” said HVS New York Managing Director Roland deMilleret, MAI.
Developers are also pursuing more complex projects and unconventional operational structures, which broadened the scope of work HVS New York completed over the year. In addition to appraisals and feasibility reports, the team offered consulting services including performance forecasts for newly developed franchise brands in Manhattan, the negotiation and selection of management companies, and renovation and repositioning consulting for aging hotel assets.
About HVS New York Consulting & Valuation
Led by industry veteran Roland deMilleret, MAI, the HVS New York team provides expert valuations and feasibility studies for existing and proposed hotels, as well as market studies and expert testimony for property-related litigation. During the firm’s 35-year history in New York, the HVS hotel consulting and valuation team has conducted thousands of assignments for full-service hotels, including some of Manhattan’s most high-profile assets. HVS New York also advises lenders, developers, and owners on a wide range of hotel product types, including complex mixed-use developments, bond-financed assets, and structured leases. Its Manhattan Lodging Report, distributed quarterly, illustrates historical and projected hotel performance, supply, and transaction trends for the city’s hotel industry. The Manhattan Lodging Report will be released at the 37th Annual NYU International Hospitality Industry Investment Conference in New York City on June 1, 2015. To receive a copy of this report, please contact Roland, Erin, or Chu.
Visit HVS New York to learn more.
|Roland deMilleret, MAI|
(516) 248-8828 ext. 269
|Erin S. Bagley|
(516) 248-8828 ext. 236
|Chu Y. Xu|
(516) 248-8828 ext. 277