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A New York City Hotel Glut Coming?

We've commented before on the outrageous hotel prices in New York City and noted that this market saw the biggest increase in rates over the past year. That kind of revenue opportunity makes real estate developers salivate, so Thompson Hotels and others have been on a building spree this year.

The hotel industry is known for getting caught up in booms and busts though, so this New York Sun article strikes a cautionary tone: Amid Boom, a Fear of Glut in Hotels.

There's nothing close to a glut right now, of course. "Many hotels in Manhattan will exceed 90% occupancy for the year, and some are likely to exceed 95% occupancy." But when 20, 30, or 40 new hotels open up in one year--and maybe the economy takes a breather--then what? "There will be a lot of pain," a principal at BD Hotels, Richard Born, said. "Budget hotels being developed for $400,000 per key and luxury hotels being developed for $1 million-plus per key will not survive." (Yes, you read that right, developing a hotel in Manhattan can cost a million bucks per room.)

Bad news for hoteliers could mean some rate relief for us commoners who are avoiding the city until prices return to sanity. Keep building please!

[Photo: Standard NYC Hotel, Opening in '08]

Related Stories:
· Amid a Boom, A Fear of Glut in Hotels [NY Observer]
· Hotels in New York [HotelChatter]

Tags: Hotel Chelsea Takeover / Andre Balazs / Richard Born / Ira Drukier / Hotel Closings / → All Tags

The First Week of The Chelsea Hotel Takeover Ends With Andre Balazs

The earth-shattering news that the long-time manager of the legendary old-school hotel/residence/bohemian artist camp The Chelsea Hotel was being kicked out for a slick hotel management company is still producing aftershocks.

The biggest one comes today courtesy of Page Six who says Andre Balazs may have some plans up his sleeve to turn the hotel into a Chateau Marmont East as he stopped in for a look-see.

We hear Balazs, with his knack for historical preservation, will have a role in running and restoring the place. Now all he has to do is figure out how to entice people who have long lived there for little to no rent to vacate.

Naturally, this has the devoted residents of the Chelsea Hotel up in arms saying they will not be "enticed" by any means. However, they have already received a notice about paying outstanding balances. The future looks grim indeed.

To us hotel geeks, it's interesting to note that Balazs would partner up with B&D again after it seems like the Mercer Hotel partnership went a little sour. Then again, Balazs would be crazy (!) to turn down a Chateau Marmont for the East Coast. Note to National Enquirer editors: Send someone up to NYC as soon as Marmont East opens!

[Original Photo: Lindn]

Related Stories:
· Chelsea Hotel's New Management Revealed [HotelChatter]

Tags: Hot Hotelier News / Ira Drukier / Richard Born / BD Hotels / Hotel Chelsea Takeover / → All Tags

Chelsea Hotel's New Management Revealed!

Where: 222 W 23rd Street [map], New York, ny, United States, 10011

The NY Post has the scoop today on the new management for the legendary The Chelsea Hotel. The Post reports that Richard Born and Ira Drukier, "of Mercer Hotel fame," will be doing some revamping of the bohemian outpost. Now, when we think of the Mercer Hotel we think of Andre Balazs but Born and Drukier were his silent partners in the hotel.

Born and Drukier (B&D) are the guys behind a lot of Manhattan hotels, notably the still-unopened Downtown Hotel by DeNiro and the Chambers Hotel. These developer/hoteliers were even featured in NY Mag a few years back just as that hotel was about to open. The piece talks a bit of a struggle with Balazs over credit for the Mercer. Also, interesting to note: Schrager loves these guys.

The NY Times also profiled this hotelier team in 2004, calling their business style "freewheeling" that included some major misses. For example, they bought a piece of land south of the Maritime Hotel on 13th and Ninth. But after 9/11, they decided not to construct on it and sold it off. The buyers, William Achenbaum and his son, then built the Hotel Gansevoort there.

But the important question is what does this mean for the Chelsea Hotel? It's still too soon to tell but B & D will have to put up with a lot of angry long-term guests, something they have probably never encountered before. And the Post hints that Stanley Bard might not be completely out of the picture. Let the soap opera begin....

[Photo compiled from: New York Social Diary]

Related Stories:
· Ch-Ch-Changes at the Chelsea Hotel [HotelChatter]
· Changing Times at the Chelsea [NYPost]