Manhattan Super 8 Goes Independent

Apple Core Hotels, the king of mid-priced lodging in Manhattan, is going independent. Following an extensive renovation and repositioning, the company relaunched its former Super 8 into The Hotel @ Times Square, a modern looking yet affordably priced (rates start at $119) property that offers guests a near-all-inclusive experience.

And according to Apple Core President & COO Vijay Dandapani, the debranding may not be the last. He says the company plans to convert the other four chain properties it operates in Manhattan to independents.

The 208-room Hotel @ Times Square offers guests an array of complimentary amenities unmatched by any New York City hotel. Among the services bundled into the room rate are WiFi Internet access throughout the hotel, calls anywhere in the U.S, printing, continental breakfast, coffee service, weekday newspaper delivery and fitness center access. The redesigned guestrooms feature upgraded bedding, flat-screen TVs, iPhone docking stations, cordless speakerphones and in-room safes.

In addition to his executive duties with Apple Core, Dandapani is active in local and state hospitality associations and writes a lively and thoughtful blog on happenings in the New York City hotel market. We spoke with Dandapani recently about the new hotel and the state of the Manhattan lodging industry:

What’s been the reaction of guests to the new property?

Fantastic. We live in an age of new consumer awareness. There is a cloud over the tendency to splurge, which affects our industry, so we’re looking to take advantage of that while that cloud is still there. People always wanted value for their money, but they’re more conscious about it now. The hotel reflects all these things. We have flat-screen TVS, free WiFi, free breakfasts, free cappuccino, free long-distance calls—things that really don’t cost much but which annoys people when they have to pay for it.

I just got back from London, and they charge you for using AT&T USA Direct, for your Internet and for everything else. Many hotels at our level have offered these things, but we go a step higher in quality.

Given the cost of doing business in New York, how are you able to offer these services at the rates you charge and be profitable?

Take the long distance, for example. It really doesn’t cost very much to offer. Cappuccinos are similar. Starbucks charges you four bucks for more froth than anything else, and it’s outrageous. There’s very little milk in it, so it’s nothing more than your regular coffee and it doesn’t cost anything to steam it. Consumers know all this, so we choose not to take the consumer for a schmuck.

As far as rate, we’re like everyone else in that we alter rates based on demand and supply. If you come here on shoppers’ weekend, the rate won’t be the same as it is in January. In fact, it will be more than double our rates in January. But it’s still a value relative to most other hotels in the city.

Why did you decide to make this property an independent versus branded?

The answer is nine percent [the percentage of room sales many franchise chains charge]. New York City enables us to set ourselves apart, and here it can actually be a plus to be an independent and not have a brand affiliation because consumers want to stay in a place that has character. When you’re going to New York or London or Paris, you want to stay in someplace that is a little different. The hotel’s sign has a cutting-edge, Gen X kind of look to it, and that helps.

Obviously, the brands yield business for you. Can you market your hotel for the same amount of money or less than what a franchise costs and get the same results?

I’ve not spent one dollar more in advertising, and that’s no exaggeration. We’ve replaced that business by going through some select third-party distribution channels. The Internet has a big role to play in our marketing. If you Google “hotel in Times Square,” ours is the first one to come up. So it’s important to choose the right name and be sure you’re positioned correctly on the search engines. It’s nothing new, but it’s something we must constantly watch. We have a person on our staff whose entire job is monitoring us on websites around the world and with all the search engines. We’re a destination city; we’re not competing with Washington, DC or Boston, we’re competing with London and Paris.

Do you have any future development plans?

Our plan is to rebrand all of our hotels in this fashion. The New York market is pretty shaky right now in terms of ownership. There are hotels that have already defaulted on their conduit loans, and there are others that will probably do so too because we’re looking at 10,000 new rooms coming into the market on top an existing inventory of roughly 75,000 rooms. That’s a big increase, about 15 percent, so there will be some opportunities. I just don’t know where they are and how soon they’ll come up, but probably more near-term than long-term.

When will the New York City market rebound?

It really depends on the shakeout of the new inventory coming on the market. We need the larger economy to come back, but I don’t know when that will be. If I were to guess I would say fourth quarter of next year in terms of rate stability and profitability.

How does the upcoming shopping season look for you in terms of demand for your properties?

It’s fair to good, but I wish it looked better. It will be a profitable two weeks but I’m not as optimistic for January.

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