Hyatt to add Park Hyatt in New York expansion

By Dow Jones Newswires-Wall Street Journal
Posted Nov. 3, 2010 at 6:25 a.m.

Hyatt Hotels Corp. intends to open its first luxury hotel in New York–a 210-room Park Hyatt–in a Midtown condominium tower under development by Extell Development Co. In unveiling plans for the luxury hotel, set to open in 2012, Hyatt has gone from just one hotel in Manhattan–the Grand Hyatt in Midtown–at the start of this year to now having plans for six.

Hyatt last week announced two Hyatt hotels to be built by Hersha Hospitality Trust in Greenwich Village and Midtown next year. Those follow two of Hyatt’s Andaz boutique hotels that opened this year in Downtown and Midtown locations. The Manhattan surge underscores Hyatt’s declaration in January of its goal to bolster its presence in key cities led by New York.

Park Hyatt is a brand more familiar to international travelers, with 21 locations in cities such as Moscow, Tokyo and Sydney. There are only four other Park Hyatts in the U.S.: in Carlsbad, Calif.; Beaver Creek, Colo.; Chicago and Washington, D.C.

“Because New York is such a critical market, this hotel will be a milestone for the brand’s development in terms of both representation in a key market and global visibility,” Steve Haggerty, Hyatt’s head of real estate and development, said in a written statement.

Hyatt, based in Chicago, intends to outline financial details of the project during its third-quarter earnings call on Wednesday. The hotel will be owned by a partnership of Hyatt and Extell, the developer of notable residential towers in New York City including the Orion.

The Park Hyatt’s 90-story tower under construction at 157 W. 57th St. will include 135 for-sale condos designed by Danish-born designer Thomas Juul-Hansen. The tower’s condo owners will have access to the hotel’s services, such as housecleaning and room service, at a price. The hotel, designed by architect Christian de Portzamparc, will include a ballroom, meeting rooms, a spa, a fitness center and an indoor swimming pool.

Hyatt hasn’t yet set rates for the Park Hyatt. Nightly rates at luxury hotels in the city have rebounded of late, rising by 6.6% in the first nine months of this year from the year-earlier period to an average of $360.81, according to Smith Travel Research. In the same span, occupancy at the city’s luxury hotels has risen by 3.1 percentage points to 79.7%.

The Park Hyatt’s timing might also be a benefit. New York hotels must contend this year and next with a wave of openings-6,577 new rooms in total this year and 3,415 next-that will sap their occupancy and rate growth, according to Lodging Econometrics. But, in the city’s luxury-hotel market, that supply surge will end this year.

Lodging Econometrics tallies four luxury hotels totaling 1,261 rooms that opened in the city this year, amounting to a 13% growth rate. But apart from the Park Hyatt, there are no luxury hotels slated to open in the city in 2011 or 2012. That bodes well for the Park Hyatt’s 2012 launch.

“To the extent that there is a recovery in the luxury business, which we’ve begun to see, they’ll be opening into a good period,” said John Fox, a senior vice president with Colliers PKF Consulting Inc. in New York.

-By Kris Hudson, The Wall Street Journa

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