NEW YORK --
Legislation to limit New York City hoteliers' options for
converting properties to residential uses "is highly likely to
create the imaginary crisis that it is designed to prevent,"
according to Joseph Spinnato, president of the Hotel Association of
New York City.
In remarks prepared
for delivery at a City Council hearing, which was canceled
following an agreement to increase the hotel room count from 150 to
348 in the controversial Plaza Hotel conversion, Spinnato wrote
that there is no shortage of hotel rooms in the city and thus "no
crisis" caused by conversions.
But he warned that
the city would hurt the growth of its hotel business by interfering
with owners' rights to make business decisions.
That could
discourage others from investing in the New York hotel business,
resulting in reduced inventory and lost jobs -- the very things the
council are trying to prevent.
The council was to
take up debate of a bill that would limit hotel owners to
converting only 20% of room space to residential use. Under the
proposal, hoteliers could apply for "relief" from the terms if they
cannot earn "a reasonable financial return" on a hotel
operation.
In a preamble to
the legislative proposal, the sponsors -- 32 of the council's 51
members -- said it was reported that New York's hotel occupancy
rates reached 100% on more than 200 nights in 2004.
They also cited a
"long-term trend" of reduced room availability due to conversions
to residential or office space, adding that "industry sources have
indicated there may be more than 15 major hotels poised to close
their rooms to tourists in favor of converting to condominiums or
cooperative apartments." They said they fear tourism will suffer
and jobs will be lost as a result.
Spinnato, in his
prepared remarks and in an information package prepared for council
members by Lodging Investment Advisors in New York, relied on Smith
Travel Research and PricewaterhouseCoopers when reporting there are
80,417 available hotel rooms in the city, a number that rose by
close to 7,000 in the last five years.
In addition, he
said that the two firms' data indicate it is "highly likely" there
will be another 6,464 rooms in the next five years.
Further, according
to Spinnato, the hotel closure rate in the last decade was less
than 1%, well below the national average. The hotel occupancy rate
is 82%, he said.
As for jobs,
Spinnato said that with the rising number of hotels rooms, 3,750
hotel jobs had been added in the last five years.
Continued growth in
the number of hotel rooms is projected to boost employment by well
over 3,000 in the next five years, Spinnato added.
To contact the
reporter who wrote this article, send e-mail to Nadine Godwin at [email protected].