With lots of inspiration often coming from across the pond and filtering through to influence trends in the UK, we spoke to Vijay Dandapani, president and COO of Apple Core Hotels and recently appointed chairman of the Hotel Association of New York to discover exactly how the hotel market in NYC is holding up.
How are boutique hotels in NY performing at the moment?
Boutique hotels were doing exceedingly well until the end of last year. However, at the moment there are some headwinds brought on by a couple of factors such as an unprecedented growth; over 15% in the past year and a half and almost 40% since the financial crisis! The other factor is the even faster growth in new types of holiday accommodations like short-term home rentals despite the existence of specific regulations that restrict much of that activity.
What are the main drivers of business in boutiques in NY?
The single biggest driver is location. Being situated in a central spot from the point of view of visitors intent on a range of activities from shopping to museums to attractions such as Broadway and landmarks contributes in large part to success. That said boutiques with a defining characteristic be it a theme, facilities like a roof-top bar with panoramic views or even a signature drink can make for loyal and repeat clientele while also intriguing new customers.
Have you seen a rise in visitor numbers from overseas markets to NY?
New York’s continual rejuvenation and remarkable safety for a mega city has ensured a steady rise in international travel. It is a trend that took-off in the early nineties concurrently with the remaking of Times Square when it shed its dodgy storefronts and most dramatically with the installation of the Sony Jumbotron which too has long been replaced with more contemporary electronic display screens. The country that sends most tourists to the US is the United Kingdom but the leader for year-on-year growth for the past five years has been Brazil. It is unclear if the current economic crisis in Brazil will be a damper but so far it has not had an impact on hotels in New York City.
Do you think the dining standards are high in boutique hotels in NY?
Many high-end boutique hotels have celebrity chefs that bring much desired cachet and an eclectic clientele with the food standard and quality being of the highest order. New York’s long dining hours, which start as early as 5pm in some restaurants and do not end till the wee hours often results in at least two turnovers of a table, making restaurants more profitable than in other locations. The city attracts some of the best culinary talents from around the world often resulting in the offerings being better than in their home countries. Examples include Jean-Georges Vongerichten at the Trump Hotel, Café Boulud at The Surrey and the UK’s Gordon Ramsay at the London NYC hotel.
What are the main trends affecting the NY boutique hotel industry today?
The most momentous trends are in distribution and payment technology. With regards to distribution, the entry of Apple and Amazon could have a substantial impact on costs and presence in the market place and go some way towards upsetting the current stranglehold OTAs have in that sphere. Mobile presence is key – which means having a mobile enabled website for starters – as traditional websites do not display well on tablets and mobile phones. Google’s search algorithm recently underwent a (secret as usual) change that allegedly favours mobile-smart platforms.
Have you seen a change in the type of guests who visit boutique hotels in NY?
Yes, beyond the ubiquitous millennials there is an increasing number of baby-boomers; after all they are the ones with the money and the time!
What are some of the key focuses for you this year in your role as chairman of the Hotel Association of New York?
I have come into this role at a key moment in the over 135 year old organisation as it undergoes a transition in its leadership as well as coping with a very dynamic marketplace. The dynamic and diverse nature of ownership of hotels is creating differing expectations of the hotel association. For example, pure asset owners have vastly different perspectives to owner-operators with the former having little patience for working through labour and legislative issues due to their relatively short investment horizon. I am also looking to make the Association more relevant and known to legislators and general citizenry. This could include more ‘townhall’ like events where senior management interact with a range of people including regular citizens with a view to highlighting the opportunities provided by the industry in New York and its impact on civic life.