NEW YORK—Superstorm Sandy continues to complicate hotel operations in New York, particularly as hotel managers balance accommodating displaced guests with honoring reservations for runners in this weekend’s New York City Marathon.
The death toll in New York resulting from Sandy climbed to 40 on Thursday as the city recovered from the storm that brought 90 mph winds, raging waters and knocked out power throughout most of the city. Officials said Thursday that power would be restored by Saturday to lower Manhattan but would take longer in the outer boroughs and northern suburbs.
“The hotels have stepped up to the plate,” said Lisa Linden, spokeswoman for the Hotel Association of New York City. “They have the care and comfort of New York’s hotel guests in their top priorities, and the hotels have followed the guidelines as set forth in terms of safety.”
Sean Hennessey, CEO and founder at New York’s Lodging Advisors, said occupancy in the city increased to capacity levels at the onset of the storm and has continued at that level since.
“Occupancy is likely to remain above historical norms for several weeks due to a combination of marathoners, stranded travelers, repair crews, displaced homeowners and corporate demand for makeshift offices and employee accommodations,” he said. “While there are some challenges with guests who want to stay past agreed-upon departure dates, many guests are willing to do their part by doubling up where possible or agreeing to be relocated to another property within the greater metropolitan area.”
Denihan Hospitality Group, which owns or manages 11 hotels in the city, reported 10 of its hotels remain open, with the exception of The James New York in Soho.
“We have several marathon groups in as well as individual runners and have been able to honor all reservations,” said Danette Opaczewski, executive VP of operations. “We were able to relocate a group of 52 Italian runners from one property to another, which required moving them from doubles to quads, but all have a place to sleep.”
Opaczewski said she expects The James to reopen Sunday, assuming power will be restored by Saturday afternoon. Affinia Dumont and Affinia Shelburne on Murray Hill are with limited power, she said, but the hotels continue to handle guests “with appropriate services and staffing.”
Opaczewski said Denihan’s hotels that have power are running at or near full occupancy, and she expects them to operate at full occupancy through the weekend. She said hotels experienced “a great deal of cancellations” earlier in the week, but with the significant number of extensions as a result of the storm, they continued to run near full occupancy.
The same was true at the TRYP New York City Times Square South, where GM Frank Nicholas said his team is juggling cancellations, the needs of guests already on property and pending weekend demand. "It’s a delicate balancing act that our reservations team has handled fantastically this week."
Preliminary daily data from HotelNewsNow.com parent company STR shows strong occupancy generally throughout the market.
Across New York, a sample of just more than 100 hotels reported occupancy at 80.6% on Monday, 83.4% on Tuesday and 86.6% on Wednesday. Specifically in lower Manhattan, a smaller sample of hotels reported occupancy at 77.2% on Monday, 76.5% on Tuesday and 77.5% on Wednesday.
“Based on those preliminary data points, it seems that daily occupancies continue to be well above 70%, and ADRs are about in line with where they were prior to the super storm hitting,” said Jan Freitag, senior VP of global development at STR.
Resolving revenue-management challenges
The toughest challenge for Jennifer Rota, GM of the Distrikt Hotel in Manhattan, was revenue management, specifically contacting guests to see if they were going to arrive while making room for those guests who were stranded. The Distrikt never lost power but did experience six hours of Internet outage and a day-and-a-half without phones.
“We were able to accommodate all in-house guests and either heard from arrivals or made judgments on the probability of arrival by the country of origin,” Rota said. “Facebook and Twitter were a huge help, as many of our overseas guests keep in contact with us through those channels. When we had a room not in use for employees or guests, we extended rooms to our corporate accounts in need. That pretty much filled us up each day.”
Denihan’s Opaczewski said throughout the storm and its immediate aftermath, Denihan extended all guests at their current rates.
“Presently and through the weekend we are at market pricing,” she said.
The TRYP New York City Times Square South is doing the same, Nicholas said.
Across New York, average daily rate was reported at $267.55 on Monday, $277.13 on Tuesday and $292.32 on Wednesday, according to the sample size of just more than 100 hotels from STR.
“We are being very, very careful with pricing,” the Distrikt’s Rota said. “Even though it may mean loss in ADR, we decided to offer reasonable rates when rooms become available.”
“This isn't a time to quibble over a few dollars of ADR or revenue,” she continued. “It's about helping people.”
Given the area of impact and timing of the storm, Freitag said STR does not expect any material impact to the U.S. hotel performance numbers.
“If past performance is any guide, the hotel industry in the affected areas will recover and recover quickly,” he said. “Historically, we have observed that the properties that are continuing to operate in the aftermath of a natural disaster see an influx of demand from displaced people, (Federal Emergency Management Agency) officials, news crews and insurance adjusters.”
“While a few properties are closed for now, the majority of hotels in the greater New York metro area are open and reporting data to us,” he said.