Reach for the stars

Marriott International has just opened the tallest hotel in the western hemisphere and the first double decker hotel in the US. It’s also the model for a roll-out of dual pack Courtyard and Residence Inn hotels and an example of how strong brands can be flexible when it comes to art and design. Marriott International president and CEO Arne Sorenson and the hotel owner, Harry Gross of G Holdings, reveal why this New York City skyscraper is such a special addition to their portfolios
Marriott International president and CEO Arne Sorenson opened the hotel on January 7.
By Louise Oakley
Tue 25 Mar 2014 05:24 PM

There has to be a pretty special reason for a Dubai-based hotel reporter to leave the hype of the emirate’s hotel industry for an overseas launch, particularly when this means abandoning the balmy January climes of the UAE for the west’s bitter winter chill. But, just a matter of days after the world’s largest firework extravaganza lit up Dubai’s skyline at the dawn of another year, I jetted off to New York City and plunged into the polar vortex for the opening of the Residence Inn and Courtyard by Marriott Central Park, a hotel with enough accolades to rival the records normally reserved for Dubai.

The building is the first double-decker hotel in the US, housing two select-service Marriott brands on top of one another: a 378-room Courtyard by Marriott Central Park, and a 261-suite Residence Inn by Marriott Central Park. Comprising over 370,000ft² and rising 68 floors above street level, it is the tallest dedicated hotel building in the western hemisphere, located right in the heart of Midtown NYC. The hotel cost owner Harry Gross US $340 million, with significant investment into telecommunication meaning it’s the first hotel in the US to offer free international phone calls, while equal attention paid to art and style has culminated in full wall murals created by renowned abstract expressionist artist, William DeBilzan, who also designed artwork for the world’s tallest building, Dubai’s Burj Khalifa.

The property is the result of a long-standing relationship between Marriott International and G Holdings, the company headed by Harry Gross, and it’s now set to be the model for a roll out of Courtyard by Marriott and Residence Inn by Marriott dual-packs. The launch comes at the peak of New York’s tourism trade, with 2013 attracting an all-time high of 54.3 million visitors, including 42.9 million domestically and 11.4 million from countries outside the US. The city is practically a year ahead of schedule of meeting its target of 55 million tourists by 2015. It will also reach another milestone in 2014, with 100,000 rooms due to open by the year end, finally giving this bucket list destination the inventory it so desperately needs.

After all, even in the face of growing supply, last year New York sold one million more room nights than it did the year previous, generating approximately 30 million total rooms nights in 2013. Average annual occupancy rates are the highest in the US, with plus-87% recorded in 2013. The opportunity for investors and operators alike is clear, and Marriott now operates a massive 35 hotels across the five boroughs and is one of the international giants helping to ensure the city offers a diverse mix of accommodation types — with the new Central Park property an appealing option for both transient travellers in the Courtyard and longer-staying guests in the Residence Inn. Owner Harry Gross is confident that at this particular hotel, occupancy will exceed 90% — quite a feat for 639 rooms.

Suffice to say that the launch of this hotel in January warranted an international media presence, with both Marriott and the New York City marketing, tourism and partnership organisation, NYC & Co, keen to show off their new “extraordinary jewel” to journalists from China and the UK through to Middle East and Brazil — despite the arctic conditions forcing everyone to don hat, scarf and gloves even inside of the hotel as the new-build battled against the freeze. Gross was bold enough to joke that “other than having broken pipes every other minute and no heat, and problems with the elevators, we are fine” — and this stoic New York spirit was apparent in every facet of the property. The ambition behind the soaring elevation of the hotel, highlighted in the night’s skyline with horizontal blue bands around the 5th, 35th and 65th floors, was evident, and on a par with the great heights being achieved by the city’s tourism board.

Speaking at the launch, Marriott International president and CEO Arne Sorenson said of the city: “Even as supply has grown, occupancy in the existing hotels has grown too. New York is finally starting to get the number of rooms it needs to have. New York has always suffered from being tight as a drum in terms of ability for folks to get hotel rooms in the city, it’s made it very expensive for folks, it’s made it very difficult to have group meetings, and now I think that as the supply grows, New York not only takes on this new supply and performs really well but it becomes more compelling as a destination.

“This is a city that gets the importance of travel and the importance of the opportunity for economic growth. People from all over the world and from the United States want to come to New York, they want to do business here, experience the leisure sites here, they want to do shopping here, — New York has got it all and this hotel will be an important part of welcoming people to this city.”

The hotel, which is managed by Interstate Hotels & Resorts, a company that operates 386 hotels within North America, Europe and Asia-Pacific and which has worked with the Gross family for 18 years, expects to attract 1000 guests a day. They can choose between the Courtyard, housed on floors six to 33 and featuring bright, modern rooms zoned into areas for working, sleeping, relaxing and getting ready, and the all-suite Residence Inn, located from floors 37-65 and designed for stays of five nights or more, with a kitchenette in every suite and the comfort of a complimentary breakfast to eat-in or takeaway, grocery delivery service and onsite laundry room.

Benefitting from their dual pack status the hotels share 6000ft² of meeting space, a fitness center located on the 35th floor with floor-to-ceiling windows and an outdoor sundeck for stretching, relaxing or seasonal sunning, and both have access to the Courtyard Bistro, a casual eatery with a limited menu. All public areas feature flexible seating options; individual pods have their own TVs; sofas surround low tables for casual group dining and there is high bench seating facing the window, for those who wish to watch the city and avoid the common awkwardness of solo dining.

Technologically advanced communications and digital capacity delivers 1.25 gigabytes of bandwidth to every room, the horizontal and vertical fiber optical cable network allows for fast, extensive use on multiple devices in every room and smart TVs feature 60HD channels. International calls are free as is wi-fi as standard, a relief in one of the world’s most expensive cities. Everything is designed around comfort, ease and functionality, with the whimsical work of DeBilzan and spectacular views ensuring a refreshing sense of individuality.

Article continued on next page...

Category killers

These select-service brands — or “modern essentials” hotels as Marriott now calls them — may not have the prestige of sister labels Ritz-Carlton and JW Marriott, but when it comes to making travel more accessible for leisure and business tourists alike, not to mention generating bold returns for owners, Courtyard and Residence Inn stand tall.

Identifying early the potential of the Courtyard and Residence Inn brands to bring in the big bucks, Gross has worked side-by-side with Marriott to innovate in this space. The collaboration has resulted in the ground-up construction of five Marriott branded hotels in New York City: Courtyard by Marriott Times Square; Courtyard by Marriott at JFK International Airport; Residence Inn Philadelphia Center City by Marriott; Residence Inn by Marriott Times Square; and Courtyard by Marriott and Residence Inn by Marriott Central Park. G Holdings is now constructing a 160-room Courtyard by Marriott in Long Island City.

Sorenson describes the brands, which have been in operation for around 30 years, as “category killers”, powerful separately, but offering even more flexibility together. He estimates that there are around 100 dual-pack properties combining various Marriott brands across the US.

“I’m certain either one of them could have done fine on their own but here you’ve got an A+ location, with two distinct products which will appeal to two distinct kinds of stays – Residence Inn with its all-suite product focused on longer-term stays, and Courtyard which might be a shorter term stay and more transient business. You really tap into two distinct kinds of customers.

“From Harry’s perspective and from the ownership perspective, it also gives you the ability to leverage the infrastructure, and some of the support services, whether that be accounting for example, and apply that to two different hotels to get more economy of scale,” asserts Sorenson.

Gross agrees, commenting: “We have the advantage of two reservation systems, therefore, we benefit from the two brands. Instead of having to fill 639 rooms every day from one brand, we can fill up almost half and half from two different brands, so in terms of satisfaction of guest needs, in terms of extended stay on one side and the Courtyard transient customer on the other side, we accomplished that.”

The fact the hotels are on top of one another made the project even more appealing, he continues.

“I think that New York is unique and we have a site that is 100ft by 100ft, that’s all. And we are going up 760ft in height. That’s really possible only in New York. You cannot get this kind of building anywhere else.

“It really gave us the opportunity to think outside the box and to create this unique building and possibility where we have the entire 35th floor as a fitness centre to serve both brands, the fourth floor Courtyard Bistro to serve both brands,” says Gross, who fit as a fiddle himself apparently climbs the entire hotel via the stairs whenever he’s there.

“There’s a lot of synergy in accounting, sales, maintenance in other functions. We have one GM so there’s a lot of savings and by this small footprint, we are contributing in a way to being green — it saves energy and many other things,” he adds.

To build the new Courtyard and Residence Inn Central Park, Gross received the first construction loan in NYC made following the financial crisis of 2008 thanks to a long-standing partnership with Wells Fargo financiers.

Article continued on next page...

“It was indeed difficult,” Gross recalls. “After 2008, there was sort of paralysis in the capital markets, no one would lend any money, certainly not for new construction, even refinancing existing properties was difficult. We went to our relationship bank, which is Wells Fargo, with whom we have banked for the last 20-plus years and Tim Sloan, who right now is the CFO, was very helpful,” he continues. “I remember visiting him and he mentioned something like ‘Harry we have 40 million customers and this is the only and first loan that we have made, and he granted us this loan for $180mn’.”

Gross is clearly a man that makes things happen, although funnily enough, building North America’s tallest hotel was not actually on his agenda. He purchased the site for $32 million back in 2001, when it consisted of just a restaurant, a corner shop and clothing store, and after several years of “struggling to figure out how to build on it”, finally assembled air rights in 2008 and started from the bottom up, appointing Nobutaka Ashihara Associates as the architect.

“We didn’t have any idea what the record would be,” recalls Gross. “We tried to mass the maximum square footage that the 100ft by 100ft site could support. The idea of being the tallest didn’t occur to us until after we finished, it was just whatever we could put on the property,” he admits.

The partnership with DeBilzan, whose sculptures welcome guests in the lobby, was also something that came about by good fortune.

“Like everything else it’s just by chance,” recalls Gross. “I visited my sister-in-law in Florida in Delray Beach and saw this gallery with these iconic figures with long legs so I walked in and spoke with the sales lady there and said ‘I am opening this hotel and I want to buy all of the art here’. I added at 50% of course,” he jokes. “But there were no takers so I went home and later on that idea was still with me so I called Bill and asked him to come down to New York to talk about this hotel —that’s how I met Bill.”

The result was a 90-day project culminating in six sculptures, nine total pillars of artwork, eight paintings in the elevators and two additional paintings in the lower lobby rooms, inspired by the opportunity and freedom of New York City. Sculptures of boldly coloured thin, faceless elongated figures catch the eye and the same abstract compositions feature in the rich, textured canvases. The artist claims his work is based on thoughts and memories of real life experiences; for me as a guest, as opposed to art critic I should add, the bold use of colour brightened the environment and added an element of fun to the surroundings. But I was curious as to how Gross had incorporated the art into the project. After all, such strong international hotel brands are usually bound by fairly rigid brand standards.

“They are not necessarily famous for the art in these hotels but they are famous for many other things, which we think are the most beneficial for us as owners,” says Gross of his decision to flag the hotels under Courtyard and Residence Inn. “We try to bring in some humanity and warmth and spearhead a trend that could catch on. I believe that mixing art with where you work and live is a good idea.”

Surprisingly, Sorenson said Marriott was increasingly open to this and that many owners did seek to get involved with artwork nowadays.

“I think when you look back certainly 15 years ago, we would have said ‘no, we would like this Courtyard in Manhattan to look like all other Courtyards,’” Sorenson says, “and I think today we would say we want it to have a relationship with the way the Courtyard brand works as a whole so people will know that it’s consistent with a Courtyard experience but we actually like it to have some individual flair and if you’ve got an artist you want to work with we would love that because again it leaves an impression with the guest after they’ve left.”

Gross says he wants to start a trend and it’s worth noting that this is the same owner that made Residence Inn by Marriott Times Square the first 100%  non-smoking hotel in New York City and in the Marriott chain of hotels — a policy that is now standard across the city. He’s also just opened the western hemisphere’s tallest hotel amid the coldest temperatures New York’s Central Park has seen for 108 years. I’ve an inkling that if Gross is behind the trend, with the support already of the CEO of one of the world’s greatest hotel companies, it might just catch on.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.