Brands find footing in Brooklyn

New York City is an evergreen market for hotel development, but with the cost of real estate constantly growing, global hospitality companies are looking beyond Manhattan to the outer boroughs. To wit, Brooklyn.

The most populous of New York’s five boroughs, it has a reputation for hipness (and hipsters) with plenty of boutique and independent properties both open and forthcoming. 

But global hotel brands are steadily streaming in—a smart strategy because New York City welcomed a record 60.3 million visitors in 2016, surpassing the 60-million-visitor threshold for the first time ever, according to city statistics. 

Why Brooklyn?

“New York City is a gateway city,” said Jan Freitag, SVP of lodging insights for STR. “It’s the first market everyone looks to [because] you can’t be a global brand without a New York City hotel.” But as the cost of real estate has increased, he said, developers have been looking beyond Manhattan for prime locations. “The outer boroughs are more economical. Brooklyn has proven itself for room rates and demand. That’s what gets developers excited,” he said. 

For a brand, a New York City hotel expands corporate presence. The best strategy, Freitag said, is to look where room demand is on the rise—for example, in Brooklyn. “Smaller brands want to have a presence in New York,” he said, “but especially in that specific market, because it’s so hip and attractive.”  

And similarly, as companies increase their brand counts, it is becoming easier to find the right kind of brand to fit the right market. Marriott International, for example, has 30 brands, so one of those is likely to be the right fit for just about any neighborhood, Freitag said. 

Recent moves

InterContinental Hotels Group opened the Even Hotel Brooklyn in July, its second Even-branded hotel in New York City. The hotel is adjacent to IHG’s Holiday Inn Brooklyn Downtown, which opened in the spring and is owned and managed by New York Hotel Management. 

In July, New York Marriott at the Brooklyn Bridge completed a $45-million, 14-month renovation. The project began in May 2015 and consisted of three phases. The first phase updated the hotel’s bar, front desk and M Club lounge; the second phase—which was completed in late 2015—recreated the hotel’s Grand Ballroom (the largest in Brooklyn and the third-largest in all of New York City). The New York Marriott at the Brooklyn Bridge is managed by Marriott International and is owned by Muss Development LLC, HomeFed Corporation and Marriott International.

Hilton Brooklyn

In late November, Hilton Worldwide brought its flagship brand to Brooklyn with a new hotel housed on the site of a former rope factory in Boerum Hill. The Hilton Brooklyn New York is owned by Flank and managed by Urgo Hotels & Resorts as part of a mixed-use development on Schermerhorn Street. New York City-based design company Stonehill & Taylor used the neighborhood’s connection to Brooklyn’s old Navy Yards and industrial history as inspiration for the design, which uses rope as a recurring motif.

The midscale La Quinta brand, meanwhile, is also expanding its Brooklyn footprint. The La Quinta Inn & Suites Brooklyn-Williamsburg is accepting reservations for arrivals after Feb. 1, and several other projects are in the pipeline.

In The Works

According to the most recent data from STR, Brooklyn has 29 hotels—branded and independent—in various stages of development. Several brands have multiple properties in the pipeline: Two Comfort Inns are currently under construction in Brooklyn, one of which is slated to open in June and the other in October. A third is in the planning phase and is scheduled to open in early 2019. Two Quality Inns are also opening in Brooklyn—one in November and the other a month later. Two Holiday Inn Express hotels are planned for Sunset Park and Bedford-Stuyvesant; both expected to open in January 2018.

Other branded hotels slated to open within the next year in Brooklyn include the Hotel RL Brooklyn Bed-Stuy from Red Lion (opening February 2017); a Days Inn (opening September 2017); the Hampton Inn Downtown (opening September 2017); the Howard Johnson Brooklyn (opening October 2017); the TownePlace Suites New York City Brooklyn (opening December 2017); the La Quinta Sunset Park (opening December 2017); the Yotel Williamsburg (opening December 2017); and a Holiday Inn (opening January 2018). A Wingate by Wyndham and an Ace Hotel are also in the pipeline, although no opening date has been set for either.