While the numbers show Brooklyn’s unemployment to be well above that of the MSA and state, actual job growth paints a different picture. Design and management consulting jobs grew by approximately 20%, architecture jobs by 8%, and accounting jobs by 6% in 2008 ². Brooklyn-based film and television productions increased hiring by more than 50% the same year. The recession stalled employment at the end of 2008 and took a deeper toll in 2009. Unemployment stabilized in 2010, as new housing developments and an expanding restaurant industry reportedly helped create a need for new hires.

Leisure Demand

Downtown Brooklyn lies just a few minutes across the Brooklyn Bridge from Downtown Manhattan; an estimated 150,000 vehicles cross the bridge daily. Its location has made Brooklyn attractive for Manhattan-bound travelers looking to save money. More recently, Downtown Brooklyn has emerged as a tourist destination in and of itself.

Brooklyn Bridge Park, which opened in 2010, was named one of the “World’s Coolest New Tourist Attractions” by Travel and Leisure and was heralded as “a key and very promising early step in a larger project that includes the greening of the East River waterfront^{3 .}

Arts and cultural institutions include the Brooklyn Museum of Art, the second-largest art museum in New York City; the Strand Theater, whose expansion is scheduled for completion in 2013; the Brooklyn Transit Museum, which recently re-opened after extensive renovations; the 150-year-old Brooklyn Historical Society; and the Brooklyn Academy of Music. Each of these institutions is known worldwide and together they bring in hotel demand from a wide range of sources.

Lodging Market Overview

Source: HVS

Brooklyn’s lodging industry comprises more than 40 hotels and approximately 3,650 rooms—a near doubling of the number of hotel rooms over the past five years. For decades, Downtown Brooklyn offered only one full-service hotel, the Marriott Brooklyn Downtown. But new and proposed high-quality, full-service branded and independent hotels are shifting the balance of lodging options in the borough.

Despite the financial challenges caused by the most recent recession, eight new hotels totaling 788 rooms were developed in the Greater Downtown Brooklyn area in 2010, with seven more hotels totaling 643 rooms in 2011. At least three new hotels are under construction, with several more proposed. The following table represents the new lodging supply pipeline for the Greater Downtown Brooklyn market from 2010 to the present.

Lower land costs versus Manhattan and special tax incentives for new hotel developments have provided the main thrust behind these developments in Brooklyn. It is important to note, however, that room rates for Brooklyn hotels have historically been about 15% below those of comparable hotels in Manhattan, while labor and other operating costs have been on par.

Local hoteliers report that demand levels have strengthened rapidly over the past two years, and the market has largely absorbed the recent influx of new hotels. Increased corporate activity in Downtown Brooklyn has contributed to the rise in demand, as have weddings and other SMERFE-related group functions. Downtown Brooklyn is becoming a popular international tourist destination, and leisure demand is anticipated to keep trending upward in the near future. In addition, the entrance of new high-quality hotels has allowed local hotel operators to increase average room rates over the past year. Rate growth rebounded in 2010 and kept rising for most of 2011. Average rate growth is expected to continue as local hotels regain pricing power in line with the growing commercial and leisure demand in the market.

Conclusion