The building is the first double-decker hotel in the US, with two select-service Marriott brands atop one another: a 378-room Courtyard by Marriott Central Park and a 261-suite Residence Inn by Marriott Central Park. Comprising over 3,70,000 sq-ft and rising 68 floors above street level, becoming the tallest dedicated hotel building in the west, located right in the heart of Midtown NYC. The hotel cost owner Harry Gross US $340 million. The property is the result of a long standing relationship between Marriott International and G Holdings, the company headed by Harry Gross, and is now set to be the model for a roll out of dual-packs.
The launch creates a milestone for New York City, giving this bucket list destination an additional 639-room inventory. After all, even in the face of growing supply, last year, New York sold one million more room nights than it did in the previous year, generating approximately 30 million total room nights in 2013.Average annual occupancy rates are the highest in the US, with plus-87% recorded in 2013.
The opportunity for investors and operators alike is clear, and Marriott now operates 35 hotels across the five boroughs and is one of the international giants to offer a diverse mix of accommodation — with the new Central Park property, an appealing option for both transient travellers in the Courtyard and longer-staying guests in the Residence Inn. Owner Harry Gross is confident that at this particular hotel, occupancy will exceed 90%.
Both Marriott and the New York City marketing, tourism and partnership organisation, NYC & Co, showed off this “extraordinary jewel”. The ambition behind the soaring elevation of the hotel, highlighted in the night’s skyline with horizontal blue bands around the 5th, 35th and 65th floors, was evident, and on a par with the great heights being achieved by the city’s tourism board. Speaking at the launch, Marriott International president and CEO Arne Soren- son said, “New York gets the importance of travel and of the opportunity for economic growth. People from all over the world and from the US want to come to here to do business, experience leisure sites, shopping — New York has it all and this hotel will be an important part of welcoming people to the city.” The hotel, which is managed by Interstate Hotels & Resorts, a company that operates 386 hotels within North America, Europe and Asia-Pacific and which has worked with the Gross family for 18 years, expects to attract 1,000 guests a day. They can choose between the Courtyard, housed on floors six to 33 and featuring bright, modern rooms zoned into areas for working, sleeping, relaxing and dressing; while the all-suite Residence Inn, located from floors 37-65 and designed for stays of five nights or more, with a kitchenette in every suite and the comfort of a complimentary breakfast to eat-in or takeaway, grocery delivery service and on-site laundry room. Benefitting from their dual pack status, the hotels share 6,000 sq-ft of meeting spaces, a fitness centre located on the 35th floor with floor-to-ceiling windows and an outdoor sundeck for stretching, relaxing or seasonal sunning; both have access to the Courtyard Bistro, a casual eatery with a limited menu. All public areas feature flexible seating options; individual pods have their own TVs; sofas surround low tables for casual group dining and there is high bench seating facing the window, for those who prefer to watch the city. Technologically advanced communications and digital capacity delivers 1.25GB of bandwidth to every room, the horizontal and vertical fibre optical cable network allows for fast, extensive use on multiple devices in every room and smart TVs feature 60HD channels. International calls are free as is wi-fi as standard, a relief in one of the world’s most expensive cities.
CATEGORY KILLERS
These select-service brands — or “modern essentials” hotels, as Marriott now calls them — may not have the prestige of sister labels Ritz-Carlton and JW Marriott, but make travel more accessible for leisure and business tourists alike, not to mention generate bold returns.
Identifying early the potential of the brands to bring in the big bucks, Gross has worked side-by-side with Marriott to innovate extensively over several hotels. Sorenson describes the brands, which have been in operation for around 30 years, as “category killers”, powerful separately but offering even more flexibility together. He estimates that there are around 100 dual-pack properties combining various Marriott brands across the country.
“I’m certain either one of them could have done fine on their own but here you’ve got an A+ location, with two distinct products, tapping into two distinct kinds of customers.“From Harry’s and the ownership perspective, it also gives you the ability to leverage the infrastructure and some support services, and apply that to two different properties to get more economy of scale,” asserts Sorenson.
Gross agrees, “We have the advantage of two reservation systems, therefore, benefitting from both brands. I think that New York is unique and we have a site that is 100 x 100 ft with a height of 760 ft.That’s really possible only in NYC. We have the entire 35th floor as a fitness centre and the fourth floor Courtyard Bistro to serve both brands. There’s a lot of synergy in the departments. By this small footprint, we are contributing in a way to being green.” To build this structure, Gross received the first construction loan in NYC made following the financial crisis of 2008 thanks to a long-standing partnership with Wells Fargo financiers.
“It was indeed difficult,” Gross recalls. “After 2008, the capital markets were sort of paralysed, no one would lend any money, certainly not for new construction, even refinancing existing properties was tough. We went to our relationship bank, which is Wells Fargo, with whom we have banked for over 20 years,” he continues. “I remember visiting Tim Sloan, the current CFO, who said, ‘Harry, we have 40 million customers and this is the first and only loan made by them, and he granted us this loan for $180 million’.” Gross admits that building the tallest hotel was not actually on his agenda. He purchased the site for $32 million back in 2001 and after several years of “struggling to figure how to build on it”, assembled air rights in 2008 and started from the bottom up, appointing Nobutaka Ashihara Associates as the architect.
Gross says he wants to start a trend and it’s worth noting that this is the same owner that made Residence Inn by Marriott Times Square the first 100% non-smoking hotel in NYC and in the Marriott chain — a policy that is now standard across the city. He’s also just opened the western hemisphere’s tallest hotel amid the coldest temperatures. If Gross is behind the trend, with the support already of the CEO of one of the world’s greatest hotel companies, it might just catch on.
