Crain's New York - November 5, 2012 - (Page 6)

THE No power? Only $295 a night INSIDER Hotels were packed, but deep discounts meant lost revenue BY LISA FICKENSCHER New York City hotels were flush with guests last week, but Hurricane Sandy did its part to scare away enough business to make this one of the costliest events for the hospitality industry in the past 11 years. About 100 hotels were in the evacuation zones and were simply forced to close—many for more than a week—while dozens of other properties offered deep discounts on their room rates because they lost power and couldn’t offer guests such basic amenities as hot water, heat or light. Even those properties that could roll out the red carpet for their customers, charging full price, took a hit when the catered events and business gatherings they were counting on were canceled. “Late October and early November is a peak time for meetings and conventions, which were canceled in anticipation of the storm,” said Bjorn Hanson,divisional dean of New York University’s school of hospitality and sports management.What’s more,he added, “meeting planners have become more sophisticated than ever before in negotiating cancellation provisions that shift the burden of these types of cancellations to hotels.” BD Hotels, which operates 24 tique on West 27th Street, lost power on Monday but was able to keep its lobby warm and its restaurant open with the aid of a generator. General Manager Marco Cilia expects to lose $150,000 in revenue, due to cancellations and room-rate discounts of up to 50%. Business insurance will cover some of the losses, but hotels have high deductibles, often six figures or more, said industry experts. On the flip side, it was no fun being a guest at one of the hotels that lost power, as Frances and Raymond Howell from Liverpool, England, found out firsthand at Murray Hill East Suites on East 39th Street. The couple was in town for the ING New York City Marathon, and was most upset about not being able to take hot showers.Their only consolation was that their room cost just $150 per night—or half the amount they had expected to pay. Lucky them: Front-desk manager Ray Remdhany said new guests checking into the hotel would be charged the full rate despite the lack of electricity and hot water. Demand for hotel rooms here is so great lately that many people are willing to forgo such modern conveniences. “Every time we get an available room, it’s gone in a matter of seconds,” said Bob Diener, cofounder and president of hotel discounter Getaroom.com. “The next couple of weeks will be difficult. But we expect that a high percentage of the people who had to cancel trips here will reschedule.” by Erik Engquist properties in the city, from the swanky Mercer and Greenwich hotels to the two budget Pod hotels, expects to lose more than $1 million, mostly at its nine properties that lost power. The Bowery Hotel, for example, ordinarily charges $500 a night, but during the power failure, guests were offered a room rate of $295, which included three meals at the hotel’s restaurant, Gemma. The eatery was powered by a generator. “Normally the Bowery doesn’t sell rooms with food,” said Richard Born, principal of BD Hotels. “But we closed our restaurant to the public to accommodate our guests.” Pod 39, at Lexington Avenue and East 39th Street, at least had hot water on some floors, so guests were offered a discounted rate of about $140 per night, or a third off the normal rate.“Hot water determined whether we gave a discount of 30% or 50% off,” said Mr. Born of those nine hotels. The Hotel Americano, a bou- pod39 LITTLE COMFORT: Bed? Yes. Hot water? No. Sandy’s political winners, losers WINNERS: Chris Christie. The governor of New Jersey was on his game, first lashing out at the mayor of Atlantic City for not heeding his warnings to evacuate shorefront areas, and later praising President Barack Obama for providing federal assistance to the storm-ravaged Garden State. The governor, who later surveyed damaged areas with the president, looked like a man putting his state’s welfare above politics.But if it helps Mr.Obama win, Mr. Christie could run for the White House in four years rather than waiting until 2020. Michael Bloomberg. The mayor and his administration handled storm response with a blend of professionalism and sympathy, evacuating 6,400 people into shelters without any major glitches. His lone slip was not implementing a gridlock-prevention plan until the fourth day of the masstransit shutdown. Metropolitan Transportation Authority. The nation’s largest mass transit system managed to get all of its buses and quite a few of its trains back in service within three days of the storm, much faster than expected given the extent of the damage and the age and complexity of the system. Several days of free service didn’t hurt its popularity, either. And the Obama administration agreed to reimburse the authority for much of its stormrecovery costs. Rep. Bob Turner. The congressman from Queens, who lost his house to a fire that ravaged 80 homes when the storm struck, issued a heartwarmingly humble statement that focused on the storm’s other victims. It acknowledged his own tragedy only in the final paragraph:“I, along with many other Breezy Point residents, lost our homes last night and I am grateful that my family and I are safe after this destructive storm,” he said. “I hope you will join me in lending a hand to those who were less fortunate.” LOSERS: The power companies. Utilities rarely look like the good guys when power goes out and stays out for millions of people. But when a popular governor calls them out for being unprepared for Sandy, as Andrew Cuomo did last week, there is nowhere to hide, no matter the back story. Mr. Cuomo even threatened to direct the Public Service Commission to begin a proceeding to revoke their status as utilities in the state (never mind that the governor previously said he does not control the commission). He was especially hard on the Long Island Power Authority, writing, “It goes without saying that such failures would warrant the removal of the management responsible for such colossal misjudgments.” Mitt Romney. His opponent, Mr. Obama, got to look presidential doing storm response, earning praise from Mr. Christie, a leading Republican. The calamitous storm made it awkward to campaign and led critics to unearth a statement in which Mr. Romney talked of outsourcing federal disaster relief. To cap off the week, Mr. Bloomberg used the storm as a nonpartisan rationale to endorse the president, citing Mr. Obama’s efforts to address climate change. Chris Wight. The little-known Republican challenging Rep. Carolyn McCarthy, D-Manhattan, had to fire his campaign manager, who had the brilliant idea to tweet false information about Sandy as the storm hit. Shashank Tripathi hatched a rumor that Consolidated Edison was shutting power citywide and also posted on Twitter, “BREAKING: Confirmed flooding on NYSE. The trading floor is flooded under more than 3 feet of water.” It wasn’t. Crain’s Insider, our award-winning politics newsletter, is now a blog. Read it every day at www.crainsnewyork.com/insider 6 | Crain’s New York Business | November 5, 2012 newscom http://www.Getaroom.com http://www.empirecitycasino.com http://www.empirecitycasino.com http://www.crainsnewyork.com/insider

Table of Contents for the Digital Edition of Crain's New York - November 5, 2012

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
EDITORIAL
GREG DAVID
REAL ESTATE DEALS
REPORT: EDUCATION
CLASSIFIEDS
FOR THE RECORD
DIGITAL NEW YORK
SMALL BUSINESS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crain's New York - November 5, 2012