Analysis Reveals Costly Impact of New York City's Plan to Curb Hotel Development in M1 Zones
April 25, 2018 1:40pm
NEW YORK, April 25, 2018 -- Leading hotel industry analyst LW Hospitality Advisors has announced the findings of a comprehensive M1 Zoning Hotel Market Analysis completed in advance the City's decision whether to certify the Proposed Action as early as next week. The report identifies the potential unintended economic and social impacts for New York City if the proposed special permit to limit new hotel development in M1 zoning districts is adopted by the New York City Department of City Planning (DCP).
As indicated by one of the report's authors, Robert Van Laer of LW Hospitality Advisors, if the special permit is granted, New York City's economy would suffer by being denied the following sources of revenue generated by projected hotel development between now and 2028:
"The hotel and tourism industries are a vital part of the City's economy, generating tens of thousands of jobs, $2 billion dollars in tax revenue, and over $64 billion in economic impact in 2016," said the study's lead author, Evan Weiss, LW Hospitality Advisors. "We believe that the current action plan by the City to adopt the special permit for new hotel development in M1 zones is misguided and will reduce the potential economic and social benefits to the City in the long term."
In the past decade, New York City has substantially benefited from the growth of its tourism industry, which has spurred development of new hotels throughout the five boroughs. During this time, there has been increased hotel development in M1 zoning districts, particularly outside of Manhattan. Reportedly, 20 percent of new hotel rooms built between 2008 and 2017 in Manhattan were located in M1 zones, compared to 37 percent outside Manhattan. Despite the significant supply increases over the past several years, hotel demand has kept pace, and in most instances, exceeded new supply, causing occupancy to increase and generating increased economic activity, jobs, and tax revenues for New York City annually.
To illustrate in practical and tangible terms what the special permit would cost the city, the report details a range of benefits for residents that would be supported by the City's projected local tax revenue gain of $4.24 billion from tourism over the next 10 years:
"There should be more hotels in M1 zones, not fewer," said Gene Kaufman, Principal of Gene Kaufman Architect, who commissioned the report. "My business interests in this case align with what I truly believe is the right thing for the City. Our goal in conducting this study was to demonstrate the significant value the hotel industry brings to New York, and potentially impact the outcome of the pending decision regarding the special permit."
The full report can be found here: LWHA M1 Zoning Hotel Market Analysis
Tags: lw hospitality advisors,
new york city,
new york city lodging market,
LW Hospitality Advisors® (LWHA®) provides a myriad of services focused exclusively on hospitality and gaming real estate worldwide. Representative property types include hotels, resorts, gaming properties, and conference centers. LWHA® works globally with corporate, institutional, and individual clients, as well as with municipalities and governmental agencies on all facets of hospitality real estate.
Contact: Daniel Lesser
212.300.6684 X 101
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