There´s No Room Shortage in New York City

Following an agreement to increase the hotel room count from 150 to 348 in the controversial Plaza Hotel conversion, Joseph Spinnato, president of the Hotel Association of New York, assured that there is no shortage of hotel rooms in the city and thus no crisis caused by conversions.

However, he warned in a letter addressed to the City Council that the city would hurt the growth of its hotel business by interfering with owners´ rights to make business decisions.

That could discourage others from investing in the New York hotel business, resulting in reduced inventory and lost jobs -- the very things the council is trying to prevent.

The council was to take up debate of a bill that would limit hotel owners to converting only 20% of room space to residential use. Under the proposal, hoteliers could apply for relief from the terms if they cannot earn "a reasonable financial return" on a hotel operation.

In a preamble to the legislative proposal, the sponsors -- 32 of the council´s 51 members -- said it was reported that New York´s hotel occupancy rates reached 100% on more than 200 nights in 2004.

They also cited a long-term trend of reduced room availability due to conversions to residential or office space, adding that "industry sources have indicated there may be more than 15 major hotels poised to close their rooms to tourists in favor of converting to condominiums or cooperative apartments." They said they fear tourism will suffer and jobs will be lost as a result.

Spinnato, in his prepared remarks and in an information package prepared for council members by Lodging Investment Advisors in New York, relied on Smith Travel Research and PricewaterhouseCoopers when reporting there are 80,417 available hotel rooms in the city, a number that rose by close to 7,000 in the last five years.

In addition, he said that the two firms´ data indicate it is highly likely there will be another 6,464 rooms in the next five years.

Further, according to Spinnato, the hotel closure rate in the last decade was less than 1%, well below the national average. The hotel occupancy rate is 82%, he said.

As for jobs, Spinnato said that with the rising number of hotels rooms, 3,750 hotel jobs had been added in the last five years.