Downturn ups Dreaming of rowing in Central Park? Museum hopping on Fifth Avenue? Catching a jazz show in the Village? Now's your chance.
price pressure
on hotel rooms
Hotels from New York to Hawaii
are working for new businessStar-Bulletin staff and wire
In Manhattan and across the country, where there was virtually no room at the inn for most of last year, more hotel rooms are going vacant and at least some prices are dropping.
"The big difference is that now if you want to come to New York you can find a room. That's amazing. For most of last year the city was effectively sold out," said John A. Fox, a senior vice president of PKF Consulting, a company that tracks the hotel business.
In Hawaii, where hotel occupancy is also down so far this year, the predominantly leisure-market tourist industry is providing "added value" -- the extras that might influence the decision of whether to visit or not.
Typical is the approach of Outrigger Hotels & Resorts and its moderately priced brand, Ohana Hotels.
When bookings slip, Outrigger pops in things like an extra day, free breakfast or a companion-free rate.
Spokeswoman Nancy Daniels said the hotels are also pushing Hawaii residents to try out the hotels, hoping to make up for this year's slight dip in mainland and Asian business.
Sheraton, Hilton and other brands in the islands are doing many of the same things.
Wholesalers of Hawaii travel, the businesses that create travel packages and sell them through retail travel agents, have been padding on extras to keep competitive with other destinations and others in the same market.
Pleasant Hawaii Holidays, based in Westlake Village, Calif., has launched free days, free travel for kids and other bonuses.
San Jose, Calif.-based Classic Custom Vacations recently announced summer and fall specials such as a value book that allows its clients to dine at discounts at 26 of restaurants in the islands, free parking and discount aloha shirts.
One of the keys to this type of marketing, Hawaii hoteliers say, is to keep a basic rate structure intact but have a list of extras to pick from when business slips.
Many hotels nationwide are offering special deals for the summer. In a shift from recent years, when hotel ads in newspaper travel sections conspicuously left off room prices, hotels are now listing special deals in big bold letters: $125, $119, even $99.99.
New York City's hotel room occupancy rate for the first quarter of the year is down by 7.6 percent as compared with the same period last year, the biggest drop since 1994, according to a report released Tuesday by PriceWaterhouseCoopers.
The trend, which is being felt throughout the city's hotel industry, is echoed in other business hubs such as Boston and San Francisco, where the report said the declines are in the double-digits.
Analysts and hotel managers say the drop is largely due to the sluggish economy. But in Manhattan, a hotel construction boom is also a factor.
"Clearly we in New York are faced with the double whammy of an uncertain business climate and 3,000 new rooms this year, with an estimated 2,500 more new rooms next year," said Jonathan Tisch, chairman and chief executive of Loews Hotels. "In terms of the consumer, they can now negotiate better rates and maybe trade up to better hotels."
Sean Hennessey, director of PriceWaterhouseCoopers' hospitality consulting practice, said the economic downturn is the main cause.
"It's really due primarily to the impact of corporate cutbacks and some of the dot-com failures," he said. "We've seen the impact most pronounced in New York and other business hubs.
"The city's better hotels, which depend on a higher percentage of business travel, have seen the greatest impact."
At this time last year, most of first-class hotels were turning away 40 to 50 guests a night, Hennessey said.
New York's overall occupancy rate during the first quarter of 2001 was 72.3 percent, down from 78.2 percent during the same period last year. It's the lowest rate since 1996, when it hit 69.2 percent, the PriceWaterhouseCoopers report said.
The trend has caused hotels to change focus.
"Generally, mid-range hotels didn't take tour and travel operators, and groups of Germans or people from the U.K. visiting the States -- and now they will. They're starting to offer more inventory for guest travel for weddings, reunions, and things like that. A year ago those customers were priced out," Hennessey said.
Brian Honan, director of marketing for the Four Seasons Hotel, said his room prices have held steady despite the trend.
"Some hotels are feeling extraordinary drops in demand. Some are off as much as 20 to 25 percent. We're off far less than that," Honan said. "We're not recession-proof, but CEOs and company presidents don't forgo their desire for service and comfort just because of the economy. We're off by less than 6 percent this year."
Still, he said, some patrons are downgrading to cheaper rooms.
"There are some guests that may have been frequent suite users (at around $1,500 per night), but now they're staying in deluxe rooms at the corporate rate of $675," Honan said.
Analysts stressed that despite the drop, hotels are still making profits and the lower occupancy rate must be considered in the context of the city's streak of seven straight boom years.
"It's important to remember that last year occupancy rates increased 7.5 percent," said Fox, adding that there has been a series of increases in recent years.
"That's the context in which this is happening."
Cristyne Lategano-Nicholas, president of the city's conventions and visitors bureau, termed the slide an "inevitable adjustment."
"The silver lining is that because New York has for a number of years had the reputation that it was sold out, some people didn't even try to stay here," Lategano-Nicholas said. "Now that people know there's more room at the inn, they're willing to try again."
But some visitors said the city's famously high prices aren't dropping nearly enough.
"It's still outrageous," said Claudia Keith, visiting the city from Tyrone, Pa., to see some Broadway shows with her son.