February 10, 2020 05:00 AM
New York City has long been a destination for tourists around the world, and its hospitality sector is vital to keeping it that way. In recent months, the five-star sector has thrived and providers of mid-range accommodations have had to raise their game to stay relevant.
To gain insight into where the sector is heading, Crainʼs Content Studio recently spoke with Nicky Unkles, vice president of Lehrer Cumming, the East Coast project management division of the international project and cost management firm Cumming. Unkles has been a leader in project management services within the construction industry for more than 15 years. In addition to managing major projects in New York City, he has led hotel developments in South Florida, the Caribbean and the UK.
As vice president, Unkles is responsible for aligning with hotel brands and operators to drive all facets of the design and construction process – from planning and feasibility, to scheduling, cost estimating, permitting and closeout.
Crainʼs: What key trends have you seen in New York Cityʼs hospitality market during the past year?
Nicky Unkles: Weʼve seen a continued slowdown in the middle-market hospitality sector this past year, but the shortage of true five-star accommodations has created a significant demand for the sector and will continue to keep it hot for the near future. This is partially due to the hospitality market overusing the term “luxury” in recent years when describing accommodations.
Social responsibility is a trend that has also continued to impact the build process from the very early development stages of a new hotel to a renovation redesign.
Crainʼs: What trends are you forecasting for the New York City hospitality market for 2020?
Unkles: Despite earlier concerns of a recession, the hospitality market continues to be hot, thanks in part to the continued strong growth in the true five-star hospitality sector, which will continue throughout 2020. With the completion of Hudson Yards in 2019, the 20,000 workers engaged in that project will re-enter the labor market, creating more competition and aggressive pricing in what used to be a very heated market.
Super-tall hotels and five-star boutiques are seeing strong growth. Five-star accommodation construction continues to hum.
Over the past several years, itʼs been clear that the more traditional hospitality hubs of Times Square and Lower Manhattan are not the only neighborhoods where tourists are looking to spend their vacations. Continued hotel launches in the outer boroughs, notably in Downtown Brooklyn, Williamsburg and Long Island City, point to growth in these areas as a visitor destination.
Crainʼs: Given Airbnbʼs presence in New York and major cities across the country, how are traditional hospitality providers responding?
Unkles: While Airbnb is present in this market, the product and experience offered differs on many levels from a traditional hospitality environment. Hospitality, particularly for mid-range and luxury brands, goes beyond accommodations—itʼs the experience thatʼs created, from a guestʼs initial greeting on through the evening turndown service, and the guestʼs ability to have 24-hour access to room service and concierge.
Airbnb doesnʼt compete with a true hospitality experience. That said, Airbnb has and will continue to impact limited service hotels, if they donʼt change to a more tailored one-on-one service approach to guest stays.
We will have to wait and see if the limited-service market has a major response.
Crainʼs: What are the biggest challenges facing the hospitality market in New York City at the moment, and how do you see developers, owners and operators addressing them?
Unkles: One major challenge is an oversupply of average accommodations, and, in response, operators in this market space are enhancing guest experience service offerings.
Crainʼs: Many hospitality companies are paying attention to corporate social responsibility, on fronts ranging from environmental sustainability to diversity and inclusion. How is this shaping the hospitality industry in New York?
Unkles: The hospitality industry in New York, and elsewhere, is evolving to engage purpose-driven Generation Z sustainability conscious consumers (who will make up the largest generation of consumers) and develop actionable corporate responsibility strategies and programs that will impact operations and business management decisions regarding diversity and inclusion.
One of these social responsibility strategies is reducing carbon footprints. For instance, LEED-certified building owners are maximizing their propertiesʼ energy usage to align with climate emissions reduction goals.
Other social responsibility strategies include improving labor policies, participating in fair trade, charitable giving, volunteering in the community as a team, corporate policies that benefit the environment and socially and environmentally conscious investments.
Crainʼs: Where do you see the most innovation taking place in New York Cityʼs hospitality industry and nationwide?
Unkles: Over the past several years, luxury hospitality brands have embraced being synonymous with lifestyle brands, and we see that manifested through the growth in projects that feature both hotel guestrooms and condominium residences. In New York, classic luxury brands like the Waldorf Astoria are renovating their properties to feature several hundred residences, while new modern brands such as the PUBLIC hotel off er just a dozen unique and highly desirable condominiums.
As new hotels are built and older ones undergo renovation, technology is at the forefront of decision-making. Because change is so rapid, it is not enough to just install the technology that is in current standard use, such as USB outlets or Bluetooth speaker systems.
In general, innovative hospitality brands at the forefront of their markets are choosing to expand to North America. This includes Six Senses, Travel + Leisureʼs “No. 1 Hotel Brand,” which is building its first property in the Western hemisphere in New York.
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