Is NYC Reopening To Foreigners Too Little Too Late For Lockdown Ravaged Hotels?

Written By BlabberBuzz | Tuesday, 16 November 2021 05:15
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After an international travel ban was removed last week, tourists are expected to flock to the Big Apple for the holiday season — but for dozens of New York City hotels, it may be too little, too late.

A number of well-known buildings have already succumbed to the plague, including the Roosevelt Hotel near Grand Central Terminal, the Excelsior Hotel on the Upper West Side, and the century-old Hotel Pennsylvania across from Madison Square Garden, which is now facing demolition.

The Post has uncovered that more than 30 more hotels, largely smaller ones that haven't yet reopened, are in danger of being sold or permanently shut down. GAM Hospitality Advisors compiled the list, which includes upscale stores like The Hudson, Ian Schrager's stylish Midtown establishment that opened in 2000, as well as the Paramount, Avalon, and Roger hotels.

“The burdens that have been put on them by the lack of tourism over the last 20 months and by the city and the labor union, will likely result in their permanent closure,” Geoffrey Mills, president of GAM Hospitality, stated.

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Despite being on GAM's list of hotels in danger of shutting, the Roger and Paramount hotels' websites both state that they plan to reopen in the spring of next year. The Hudson and Avalon, however, are still closed and haven't announced any intentions to reopen. The Roger, Paramount, and Avalon did not reply to requests for comment right away. The Hudson was unavailable for comment.

While visitors are returning in force, with many hotels filling up over the weekend, business travelers are notably absent, leaving big holes in their financial statements. According to Jan Freitag, National Director of Hospitality Analytics for CoStar Group, the occupancy rate on Wednesday was only 63 percent, compared to the "low 90s" on the same Wednesday last year.

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In August, the vast Jacob K. Javits Convention Center began hosting meetings and trade exhibitions, but the events are smaller and draw fewer guests, and the calendar for 2022 has been difficult to fill. On the 2022 calendar, there are about 17 shows mentioned, compared to the 175 concerts the convention center regularly books each year. “The calendar is fluid and changes daily,” Javits spokesman Tony Sclafani told The Post.

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According to spokesman Chris Heywood of the city's tourism agency, NYC & Company, business travel will not fully return until 2025. According to industry analysts, some prominent hotels that were shuttered last year reopened recently to capitalize on the influx of holiday travelers as Broadway and the borders reopened — but also to escape expensive severance payments to furloughed hotel workers.

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In October, Mayor de Blasio signed legislation requiring closed hotels to pay laid-off employees $500 a week starting on Nov. 1 for at least six months if the hotel has more than 100 rooms and laid off more than 75 percent of its employees during the pandemic.

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In addition to reopening at the beginning of the month, the hotels were able to avoid paying the fines by rehiring 25% of its workforce. Last month, the Hotel Association of New York City filed a lawsuit against the city, claiming that the law is harming a sector that has already experienced significant losses. Meanwhile, the New York/New Jersey & Gaming Workers Union claims that just under half of its members have lost their hotel jobs.

“The [hotel] unemployment rate remains significantly higher than almost any other occupation,” Rich Maroko, president of the Trades Council, defended the severance policy to The Washington Post. The New York Hilton Midtown, the city's largest hotel with 1,878 rooms, reopened in October after the law was announced. On Nov. 1, the Hyatt Grand Central New York reopened, as did the Omni Berkshire Place, which had previously announced its closure. However, these huge hotels are not opening all of their rooms due to a lack of demand.

For example, one of the city's five largest hotels is “maintaining an artificially low occupancy level as a labor-management tool, because it’s presently not able to hire and train all the employees to open fully,” According to Sean Hennessey, president of Lodging Advisors and a professor of hospitality at New York University, Hennessey would not reveal the hotel's name.

Despite this, the Langham on Fifth Avenue was overjoyed when 35 international guests arrived in its lobby last Monday, the first day they were permitted to enter the United States. According to a representative for the hotel, the guests occupied 10% of the rooms.

Meanwhile, according to owner John Fitzpatrick, the two Fitzpatrick hotels in Midtown Manhattan, which attract a lot of guests from Ireland, are expecting occupancy rates of 90 percent to 100 percent for the first two weekends in December. Nonetheless, neither of the hotelier's two properties will be "back to normal" next year, or even in 2023, according to the hotelier.

“If the big hotels don’t fill up, then the other hotels don’t fill up either,” Fitzpatrick said.

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