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Super Bowl helps NYC hotel score fast after $100M redo
The Tisch family is set to open the 380-room luxury Loews Regency Hotel New York after major renovations just in time for the Super Bowl.
The Tisch family, co-owners of the National Football League’s New York Giants, have reason to celebrate even though their team won’t make the playoffs. The yearlong renovations at their luxury Loews Regency Hotel New York are being completed in time for the Super Bowl.
All 380 rooms at the Park Avenue property, which is to open this month after a $100 million revamp, are booked for the weekend of Jan. 31 through Feb. 2, the day the championship game will be played across the Hudson River in New Jersey.
“We’ve been getting a lot of interest in the hotel,” said Jonathan Tisch, co-chairman of New York-based Loews Corp., which owns and manages the Regency through its lodging unit. “We anticipate we’ll get good returns on our investment.”
Loews, an insurance and energy holding company founded by the Tisch family, is wrapping up the project at a cost that ballooned from an initial estimate of $35 million six years ago.
The overhaul, which included gutting the 50-year-old Regency’s rooms, corridors and lobby, is part of the company’s plan to build up its hotel division.
It also will enable Loews to charge higher rates at the property, the landlord’s only hotel in New York City, when it reopens Jan. 16, Tisch said.
“The investment is based on the importance of the property to the entire Loews chain,” he said. “It is our flagship hotel, and as such represents the entire company.”
The makeover will increase demand for the Regency and allow Loews to charge more for its rooms, including around the time of the Super Bowl as football fans cram into the area, according to Tisch.
The game will be played at MetLife Stadium in East Rutherford, N.J.
Tisch, co-chairman of the 2014 Super Bowl Host Committee, declined to say how much guests are paying to stay at the Regency on the sold-out days, and prices are unavailable on the hotel’s website. Rooms on the Thursday before the Super Bowl start at $989.
Rates on opening night, Jan. 16, range from $519 to $2,649 for a suite, according to the website.
Across Manhattan, a hotel room costs an average $418.93 for Thursday, Jan. 30, through Monday, Feb. 3, up 64 percent from the corresponding weekend in 2013, data provided by Orbitz show.
Hotels near La Guardia Airport in Queens have New York City’s biggest jump, more than doubling to $307.58 on average, according to the Chicago-based travel-services company.
In New Jersey, rooms in Newark average $335.74, more than triple the year-earlier rate. The price almost tripled at properties near Newark Liberty International Airport, Orbitz data show.
The Regency project is part of an initiative to bolster Loews’ hotel business, the company’s smallest unit. The division, which has 20 properties, contributed $2 million to Loews’s $793 million of profit in the nine months through September, according to a regulatory filing.
That’s down from $57 million in the first nine months of 2008 as a “sharp drop” in travel spending during the financial crisis cut into demand at the hotels, according to Joshua Shanker, a research analyst at Deutsche Bank with a “buy” rating on Loews.
The company has allocated about $1 billion for hotel acquisitions, new developments and renovations since mid-2012, when it bought the Loews Hollywood Hotel in Los Angeles.
Loews’s lodging division is seeking expansion opportunities and expected to complete two hotel purchases before the end of 2013, Tisch said.
Recent acquisitions include the Back Bay Hotel in Boston and the Madison Hotel in Washington.
Loews has been slow to add hotels in major cities to attract well-paying business travelers and take advantage of economies of scale, according to Shanker.
“They’ve been under-earning because Loews had been focused on high-end destination-type hotels,” Shanker said. “They haven’t been successful in tapping into the business-traveler demographic because they don’t have hotels in all the cities where business people like to go.”
The hotel recovery has been faster in the midscale and extended-stay categories, creating headwinds for a high-end- focused company like Loews, according to Patrick Scholes, a lodging analyst at SunTrust Robinson Humphrey in New York.
“It will be challenging for them to grow as nearly all the growth of new hotels is in select service — think Hilton Garden Inn and Fairfield by Marriott and Holiday Inn Express — and they don’t have a competitive product in that realm,” Scholes said.
Tisch wants to add properties in New York, where a projected 12,000 rooms will open in 2014, bringing the city’s total to about 120,000, according to Hendersonville, Tenn.- based lodging-research firm STR.
There’s room for more hotels in Manhattan because of an increase in travelers that’s helped keep occupancies in the mid-80 percent range, Tisch said.
Occupancy in New York last year was 84.3 percent through September, compared with 63.9 percent for all of North America, STR data show.