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Hoteliers hopping on Brooklyn brandwagon
July 3 2012

Brooklyn is becoming its own brand as the borough’s demand generators increase, and hoteliers are looking at the massive Atlantic Yards mixed-use project to draw additional visitors.

Highlights
  • STR data shows occupancy in Brooklyn was up 12.8% year-to-date through April over the same time period in 2011.
  • A massive Atlantic Yards mixed-use project, which will include the Barclays Center, home of the NBA’s Nets, is scheduled to open in phases starting this fall.
  • Barry Sternlicht’s Starwood Capital Group won a contract to develop a 200-room hotel and 160-unit condominium complex along the East River.
By Harvey Chipkin
HNN contributor

BROOKLYN, New York—The “Brooklyn brand,” which has drawn a new generation of the hip and artistic, is now attracting hotels—everything from the just-announced revival of Barry Sternlicht’s “1” brand to a music-oriented hotel being developed by a well-known DJ.

A cluster of properties have opened recently or are about to open in downtown Brooklyn, creating a critical mass of hotels that enables “citywide” meetings and enhances the borough’s reputation as a destination in itself.

STR data shows occupancy in Brooklyn was up 12.8% year-to-date through April over the same time period in 2011.  Revenue per available room was up 15.2% in the same period to $98.

 

Marriott at Brooklyn Bridge, the borough’s largest hotel.
 

STR’s pipeline report shows five hotels totaling 578 rooms under construction; six projects totaling 359 rooms in the final planning stage; and 14 projects totaling 851 rooms in the planning stage.

The borough, which was the fourth largest city in the country in 1898 when it was incorporated into New York City, is now coming back into its own. Talks with owners and brand leaders about Brooklyn properties say business is good and the future bright.

“Brooklyn is becoming its own brand,” said Sam Ibrahim, GM of Marriott at Brooklyn Bridge, the borough’s largest hotel with 667 rooms. “It’s no longer a stepchild to Manhattan. Our hotel is an anchor for citywide meetings. Along with nearby hotels, we can handle groups of up to 2,000 and have done so. We recently had the Qcon event, which usually doesn’t come to the U.S. but was attracted by Brooklyn.

“The more development the merrier,” Ibrahim added. “It puts our name out in the market.”

 

Demand is there
According to industry sources, demand generators in Brooklyn include: corporate overflow from Manhattan; Brooklyn’s growing business landscape; leisure for those seeking the Brooklyn style; major events like the West Indian Festival; and the huge development of Brooklyn Bridge Park, which is revitalizing the borough’s waterfront.

Hoteliers also are looking to the imminent debut of the massive Atlantic Yards mixed-use project, which will include the Barclays Center, future home of the NBA’s Nets. The project is scheduled to open in phases starting this fall. The Fulton Street Mall is another major mixed-use project that will draw visitors to the borough.

Demand is so strong for Brooklyn properties that one hotel, the 128-room Hotel 718 on Duffield Street—coined by some as “hotel row”—was recently sold pre-opening by developers V3 to Lam Group, which also owns the Sheraton and Aloft in Brooklyn.

John Lam, CEO of The Lam Group, said the Hotel 718 will reflag and become a Hotel Indigo when it opens later this year.

“We think Indigo will be great because it is a younger brand that will appeal to Brooklyn’s younger market,” he said.

 

While many Brooklyn hotels are independent, mega-brands are jumping into the fray, such as this aloft by Starwood.
 

Lam said his company also is developing another project right now in Brooklyn—near the Marriott. It is still in the planning stages and unbranded, but Lam said, “That will be a very strong market because of the courts and offices nearby.”

“The thing about downtown Brooklyn,” said Gavin Landry, principal with Landry Hospitality, “is that there are only about 1,000 keys—underserved by any measure.”

Barry goes Brooklyn
Even Barry Sternlicht has taken notice. His Starwood Capital Group, in partnership with developers Toll Brothers, won a contract to develop a 200-room hotel and 160-unit condominium complex along the East River as part of the Brooklyn Bridge Park project. Completion of the 1 Hotel—a brand introduced in 1999 but never materialized—is expected in 2015.

“I’m very optimistic about Brooklyn,” Landry said. “I opened the Fairfield in downtown Brooklyn in July of 2011 as asset manager and acting GM and that hotel just came right out of the box, selling as many rooms as we could get. New York has always been popular for Marriott point redemption, so that worked well for us.”

“Almost everything that was in the pipeline as of 2008 simply shut down,” Landry continued. “Now a lot of projects have started up again. And with the hotel development of a hotel row around Duffield Street, that allows the neighborhood to have the Brooklyn Marriott as an anchor hotel and all these limited-service brands within walking distance—and all very close to Atlantic Yards.”

 

DJ Bijal will open the 76-room BPM hotel in Sunset Park.
 

While many Brooklyn hotels are independent, mega-brands are jumping into the fray. Starwood Hotels & Resorts Worldwide has a Sheraton and an Aloft in downtown Brooklyn and—according to Paige Francis, senior VP of global brand management for specialty select brands—the Aloft has sold out regularly Monday through Thursday since day one.

“The area has undergone a complete revitalization,” Francis said, “and now Brooklyn has a restaurant scene that ranks with that of Manhattan.”

And in another neighborhood not in downtown Brooklyn, Joseph Yunatanov is developing a 65-room Clarion in Borough Park, scheduled to open in summer 2013. Borough Park is home to thousands of Orthodox Jews with all the attendant family and business travel that community generates.

“We will be open to everyone but will focus on the Kosher-inclined,” Yunatanov said. “The neighborhood is growing, and people need rooms when they come to visit family and to do business.”

While there will not be a restaurant, the Clarion will serve breakfast and will have rooms for catering.

Rate: Not necessarily cheaper
While some operators note a rate differential with Manhattan, others say that’s not always the case.

“There are nights when we are higher than Manhattan,” Ibrahim said.

But Landry said that for a meeting, there will be a $20 to $30 gap per night, which makes a big difference for a large group, he said.

All observers agree that international travelers are finding their way to Brooklyn because, as Ibrahim said, “they like a different kind of experience.”

COMMENTS   Show All
Southern Guest
7/5/2012 6:11:00 AM
Stayed in the Condor last year, which was newly opened, because of its proximity to my daughter. It serves the Hassidic neighborhood, but it is contemporary and a very comfortable for this agnostic.
OldNewYorkBasher
7/3/2012 10:46:00 PM
ONYer: It may have been news in 2007m but it's also news today. New developments, new investors and the opening of some properties that were announced in 07 and made it through the recession unscathed. I don't live, eat and breathe New York, so it's good to find these kinds of overview articles.
OldNewYorker
7/3/2012 11:59:00 AM
This was news in 2007...
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