NEW YORK -- Luxury lodging continues to head downtown with the latest addition, the 463-room Conrad New York, occupying a building near the financial district that once housed an Embassy Suites.
Both are Hilton brands, but according to General Manager Robert Rechtermann, the Conrad will appeal to the increasingly wealthy neighborhood as well as to the many financial companies nearby.
"The demand for luxury is growing in this area," Rechtermann said. "Embassy Suites is a great brand, but business travelers in financial circles wanted a more upscale product, and it was a chance for us to bring that to them at a better rate."
"I can confirm that there is a lot of interest on the part of developers and investors adding hotel product downtown, and they are testing the limits of upscale hotel development," said Sean Hennessey, CEO of Lodging Advisors, consultants who specialize in the New York market. "The market is still evolving, and most people are counting on two things: all the office space lost on 9/11 being replaced and the mayor's initiative to make downtown a full, 24-hour residential city."
John Fox, senior vice president of PKF Consulting USA, whose offices are farther downtown than Conrad, said, "The completion of the World Trade Center complex will change things, but they are already getting better. Every day this becomes a more viable neighborhood."
The Embassy Suites closed in January 2011 and the Conrad had its opening a few weeks ago, after what Rechtermann would only call a "major investment" by Goldman Sachs, which owns the hotels. The hotel's interior was totally gutted, according to Rechtermann, though the large suite rooms maintained their size.
According to Hennessey, one reason for the conversion was that Goldman Sachs wanted a more "suitable hostelry for their customers and employees." Major changes were made to the property, including the addition of more than 30,000 square feet of meetings space (which had been minimal before). A coup for the hotel was the formation of a partnership with famed New York restaurateur Danny Meyer, who has leased space for three restaurants in the Conrad complex.
In addition, said Rechtermann, "We have a partnership with Meyer's company, Union Square Events, to do all the catering for our meetings, which will really set us apart." The hotel also has its own restaurant, Atrio, in the lobby.
The closest high-end hotel to the Conrad is the Ritz-Carlton New York, Battery Park but, said Rechtermann, "There are many business travelers who want a high-level hotel but maybe not a five-star property like the Ritz-Carlton. While we strive for five-star service, we will not be competing in every area at that level. We think that's a good place to be because there are still many companies not booking travelers in the most expensive hotels."
Other luxury properties that have opened in the past couple of years downtown are Andaz, Trump SoHo and the W New York Downtown. (View a map of the locations of some of the luxury properties downtown by clicking on the image, left
The Conrad is offering introductory weekend rates of $249. Rates vary during the week but start at roughly $400; while rooms are mostly the same size, there are two premium suites on each floor commanding upwards of $600.
"What the upscale hotels downtown need is a healthy and vibrant Wall Street, which has been regaining its footing," Hennessey said. "With a prediction of 20 million visitors visiting annually the World Trade Center memorial and a spectacular new transportation center, there is a lot of upside potential."
Andreas Oberoi, general manager at Trump SoHo New York, said that "the demand for luxury hotels in downtown New York is growing. There has been a strong luxury demand in the SoHo market, as evidenced by the success that Trump SoHo has experienced in its first two years. The Conrad opening is testament to the market in the financial district."