As the United States inches toward beating coronavirus, with 133 million Americans having been fully vaccinated by the end of May, hoteliers and industry analysts are optimistic—with caution—when it comes to development along the East Coast.
“We are optimistic on the return to normal business up and down the East Coast,” said Matt Wehling, SVP of development U.S. & Canada at Hilton. “There is still a need for both corporate and leisure travel, and demand has started picking up. We do believe markets in the Southeast will continue to recover more quickly than areas to the north that have experienced longer lockdowns.”
Miami and Atlanta both have approximately 6,000 to 7,000 rooms in the pipeline for 2021, according to Chelsea McCready, director of hospitality market analytics Southeast, at CoStar Group/STR. “For both markets, that equates to about 6 percent of existing supply, so it’s pretty robust.”
Across the country, she said, “about 3.7 percent of existing supply is under construction, and the average in our top 25 markets is 5 percent so anything above that is especially strong.”
Two Tru by Hiltons are opening in Atlanta: a 113-room property and a 98-room hotel that is slated to open in the fall. The 249-room Hilton Alpharetta debuted in March, boosting the market with its first full-service hotel in nearly 20 years. A trio of Embassy Suites also are on Atlanta’s books for this year.
“When we entered the pandemic, there was a renaissance happening in Atlanta,” said Lodging Econometrics SVP Bruce Ford, who cited the redevelopment of the Georgia Dome and new hotels slated for Centennial Park and other neighborhoods. “So there are many pockets of development and projects are being added in each area.”
In Miami, Hilton recently opened two properties in the Aventura area. The 208-room Hilton Aventura Miami debuted in March while the 100-room Serena Hotel Aventura, Tapestry Collection by Hilton, opened in May. Additionally, Marriott International’s 202-room Moxy Miami South Beach premiered in February.
Meanwhile, hotels under development in Orlando this year comprise about 4 percent of its inventory, or 4,600 rooms, McCready said. The most notable upcoming property opening there is the Star Wars: Galactic Starcruiser, at the Walt Disney World Resort, added Ford. Also an attraction, the Galactic Starcruiser is slated to open in 2022.
The city also will gain a 300-room expansion to the Gaylord Palms Resort & Convention Center this summer, Ford said.
Northeast Region
In the Northeast, Marriott’s Renaissance brand will return to New York this summer with a 208-room hotel opening in Queens and a 211-room property debuting in the city’s Harlem neighborhood. Luxury brand Aman is expected to open the 83-room Aman New York this summer, and some select-service properties have been delayed, but “will increase dramatically in the next few years,” Ford said.
Meanwhile, upgrades at New York’s John F. Kennedy International Airport are prompting hotel development. A 363-room, full-service Marriott and a 182-room Residence Inn are slated to open later this year.
“Queens and Harlem both have experienced significant growth and revitalization in recent years,” said Tom Papelian, SVP of development at Marriott. “Both Renaissance hotels are part of urban mixed-use developments and Renaissance fits well within the scope and vision of both projects.”
As for the airport properties, he added, “as more people are vaccinated, we expect the confidence level will rise and result in the loosening of informal and formal restrictions that affect travel.”
There’s activity in Boston too, particularly at the Seaport, said Anne Purcell, director of hospitality market analytics Northeast at CoStar Group/STR, and some of it is concerning given questions around demand.
A big box is coming to the Boston Convention and Exhibition Center in August with the 1,055-room Omni Boston Seaport Hotel, while Hilton launched a joint Hampton Inn and Homewood Suites at the Seaport—providing 252 and 164 rooms, respectively—in April.
“The sheer amount of rooms is going to be an issue,” Purcell said. “The city needs group and international tourism, and this is the most rooms that have opened in several years, and all at the same time.”
Capitol Corridor
Other cities in the region have less construction underway, but some new properties still are scheduled to pop up in Philadelphia this year.
The City of Brotherly Love will be home to a dual-branded Element (460 rooms) and W (295 rooms)—the Element opened in May while the W is scheduled to open mid-summer. The pandemic postponed the hotels’ original March opening date.
Situated within walking distance of the Pennsylvania Convention Center, the downtown hotels “will be a big boost for Philadelphia,” Purcell said.
Meanwhile, Washington, D.C., is relatively quiet; the 154-room Cambria Hotel Washington D.C. Capitol Riverfront opened in February.
Inventory additions are being considered cautiously, Purcell said: “Projects that are in final planning may get canceled. The next few months will be critical to see if they move forward.”
Still, others are hopeful. “The cancellation rate is only about 4 percent and I’ve seen it much higher in other cycles,” Ford said. “If vaccination continues at the same rate as it’s happening now, we’ll be a much safer country by the summer. People believe the market is coming back this year, so these projects make financial sense long-term.”