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 The Brancatelli File

joe SLEEPING CHEAP(ER)
IN NEW YORK


BY JOE BRANCATELLI

October 20, 2005 -- So you say you'll be in New York on Monday and you need a hotel room? Hey, New York is my home town. Let me help.

The Mandarin Oriental is New York's newest and showiest luxury hotel. Unfortunately, it's sold out on Monday. So is the Peninsula, except for a $12,000-a-night suite. But the St. Regis across Fifth Avenue from the Peninsula has a room for $975. The Four Seasons over on East 57th Street is getting $855 and the Ritz-Carlton facing Central Park is asking $750.

C'mon, I hear you say through the computer screen, I just need a room, nothing fancy. Fair enough. The Barclay InterContinental and the Waldorf=Astoria, those Midtown matrons of the East Side, have rooms on Monday. You got $529? No? How sad. But you can walk a few blocks down Park Avenue to Grand Central Terminal. The Grand Hyatt upstairs has rooms for just $469.

Still too much? Geez, you guys are tough. Let's swing over to the West Side and see what I can find for you. Oooh, here's something: The New York Hilton in Rockefeller Center has a room for $399. So does the Westin in Times Square. I can get you into the Marriott Times Square, but that's $459 a night and the Renaissance a few blocks away is $469.

Okay, I sense your frustration. But I've got good news--and I'm not talking about saving money on car insurance. Overheated, overpriced and often oversold Manhattan has a nifty new slew of what the hotel industry calls "mid-priced" or "focused-service" properties.

You know the ones I mean: good, practical, reasonably priced, three-star hotels that were once synonymous with suburban office parks and airport access roads. Having already made it everywhere else, these brands are moving into Manhattan. They sniff opportunity, they are shaking off their little-town blues and they have an undeniable appeal: a familiar brand name, a comfortable room, nifty extras like free high-speed Internet and a cheap room rate.

One of these out-of-towners just checked in this week, in fact. Manhattan's first Hilton Garden Inn opened on Tuesday in the Theater District. The 369 rooms have all the latest, greatest Hilton Garden Inn perks--the Garden Sleep System bed, dark-wood furnishings and Herman Miller Mirra desk chairs--and one special amenity: flat-panel televisions. But except for the fact that the Hilton Garden Inn Times Square doesn't have a pool--the first one in the 250-property chain without a pool, says marketing vice president Mark Nogal--you'd recognize this hotel anywhere.

There is, however, the matter of price: A room at the Hilton Garden Inn on Monday is an eye-popping $349. And don't look for mercy at the slew of Courtyard by Marriott, Four Points by Sheraton, Hampton Inn and Holiday Inn Express hotels that have opened in the Big Apple. You'll pay as much as $499 for a room on Monday at one of those familiar, comfortable, three-star suburban transplants.

"From my point of view, I think it's great," says Adrian Kurre, Hilton Garden Inn's senior vice president of brand management. "And I think we're being fair with guests in the sense that we're still the mid-priced option in the market. It's just that mid-priced in Manhattan is different than it is anywhere else."

Kurre's not kidding. Just a few miles away, across the Hudson River from Manhattan, a room at the Hilton Garden Inn in Secaucus, New Jersey, is just $109 on Monday night. But Manhattan is like no place else in the world and everyone in the world apparently wants to rent a crib in the Big Apple now.

After hitting emotional rockbottom in the wake of the 9/11 terrorist attacks, New York has come roaring back. The weak dollar means New York is a bargain for Europeans and they are visiting in record numbers. Domestic business travelers, who once shunned New York, have returned. A string of high-profile hotel closures--the Stanhope, the Plaza, the Empire, the Mayflower and the Barbizon have shut their doors or are being converted to condos--means that Manhattan's total inventory of guestrooms hasn't increased in years. And since New York was already the nation's most expensive city with the most costly real estate, hotel prices have spiraled out of control.

What more proof? There are now three Hampton Inns in Manhattan. Two are sold out on Monday and the one with a vacancy is charging $384. There are three Courtyards in the Big Apple; one is sold out on Monday, one has a vacancy for $399 and the other is offering rooms at $499. The Four Points by Sheraton in the uber-trendy Chelsea neighborhood is sold out. And the Holiday Inn Express, which opened on Fifth Avenue last month, sold out as I've been writing this. Earlier today, it was offering rooms on Monday night for $499.

"When you get to all our products in New York, you're adding digits to the price," says Daren Kingi, Marriott's director of sales for New York City. "There is a need for and a demand for Courtyard in New York, so the price is naturally going to be higher. That's the reality of things when you're running occupancies in the high 80" percent range.

In other words, you simply can't sleep cheap in New York. Cheaper, yes. But cheap? No.

In fact, you can't run good, cheap hotels in New York even when you try to do it. Apple Core Hotels proves that.

The company is a legend in New York hotel circles. In the last decade, it has successfully renovated distressed office buildings and shabby hotels and reopened them as good, clean hotels at low rates. Led by its chief operating officer, Vijay Dandipani, Apple Core then came up with an even better idea: Brand those renovated properties with familiar names such as Super 8, Red Roof and La Quinta.

When the Super 8 Times Square opened in March, 2002, the introductory rate was $89 a night for a comfortably furnished room that came complete with free continental breakfast and free Wi-Fi. About a year later, Apple Core opened New York's first La Quinta Inn. Same amenities, same price. As recently as last winter, nightly rates at Apple Core's five Manhattan hotels hovered around $100 a night.

But those prices are gone now. Two of the Apple Core hotels are sold out on Monday, but a room at the company's Comfort Inn near Rockefeller Center is $210. The cheapest room at the Super 8 on Monday is $249. And the Red Roof is selling its available king-bedded rooms for $320.

"New York is a funny market," Dandapani says.

Like everything else in Manhattan, funny is a relative, and very expensive, concept.

NEW YORK CONFIDENTIAL
All of the room rates mentioned in this story were quoted by the hotels' respective Web sites between 6 p.m. and 10 p.m. today. More "mid-priced" properties are coming to Manhattan. The first Wingate Inn is due next year. Hampton Inn, Hilton Garden Inn and Four Points by Sheraton each have an additional property in development. Courtyard by Marriott has two more in the works. Quikbook is a reliable, honest hotel consolidator that offers reduced rates on New York's extensive range of independent hotels. Prices on Monday night start at $225.

Copyright 1993-2005 by Joe Brancatelli. All rights reserved.