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Banner Year for New York City Hotels; Occupancy for the First
 Five Months of 2005 at 80.5%, Up 4.5%  from Same Period
 Last Year; But No New Hotel Jobs

By Randi F. Marshall, Newsday, Melville, N.Y.
Knight Ridder/Tribune Business News

Jul. 22, 2005 - By most accounts, tourism in New York City is booming -- from restaurants to local attractions to hotels. Revenue is up, visitor numbers are higher and even business travel has begun a comeback.

That's why William Simpson's tale is particularly puzzling. The Bronx resident lost his job as a waiter for the Mayflower Hotel when it closed a year ago to be converted into condominiums. Since then, he has sent out his resume to dozens of hotels around the city and he had several interviews.

But he hasn't found a job.

"So many of us lost our jobs recently, but again and again, everywhere I go, people say we will call you back -- and don't," Simpson said.

As the city's tourism industry gains ground, the hotels, too, have benefited, with higher occupancy at higher room rates.

But that's translating into very few new hotel jobs, which have yet to return to the levels recorded before the Sept. 11, 2001, attacks, according to the state Labor Department's latest statistics, released yesterday.

"These are jobs that the city's economy can't do without -- and yet we're losing them," said James Parrott, the chief economist with the Fiscal Policy Institute in Manhattan.

While a host of factors may be at work, the most significant is likely the recent trend to convert hotels into condominiums -- a trend buoyed by the booming real estate market and made more public by the recent Plaza Hotel debate. In a report he released this spring, Parrott found that more than 3,200 Manhattan hotel rooms would be lost in 2004 and 2005 -- and another 3,000 are in danger of being similarly converted in the future.

"With the price of real estate and the price of construction, and the amount of money you can get for condominiums, hotels are likely to continue to convert," said Peter Ward, president of the New York Hotel Trades Council, the city's hotel union. "And if they do, the consequences are that the city will lose those jobs it can no longer afford to lose."

A 200,000-square-foot hotel could produce more than 300 jobs, Ward estimated. That's compared with about 30 for a condominium, he said.

Of course, as some hotels close, other new ones open, but that virtually even equation may not be enough to drive job growth. The broad leisure and hospitality sector is key to the city economy, employing about 280,000 workers. NYC & Co., the city's tourism agency, estimates visitor spending in 2004 at $15.1 billion.

Since June 2001, the leisure and hospitality industry has gained 15,800 jobs, a 5.9 percent jump. But the hotel industry isn't keeping up; in the same time period, it lost 100 jobs.

Conversions aren't the only factor -- especially since many of them haven't happened yet. Some hoteliers are simply trying to do more with less, making existing employees more productive without hiring more. Others say the hotel jobs simply haven't caught up with the rest of the industry yet.

"The only way employment grows a lot is if you build more hotels, and there's a significant lag there," said James Brown, a state labor market analyst.

Restaurants and tourist attractions grow faster, he said, because it's a lot easier to build and expand them.

On the whole, the city's hotel industry is doing well. Occupancy for the first five months of the year stood at 80.5 percent, an increase of 4.5 percent from the same period last year, according to Smith Travel Research in Hendersonville, Tenn. The average room rate is up 10.3 percent, to $187.27.

And any losses in citywide hotel employment are not necessarily broad-based. The New York Hotel Trades Council reported that its membership has increased 8 percent during the last three years, thanks to some new jobs at unionized hotels and new organizing efforts.

At the Grand Hyatt New York, for instance, employment has steadily increased in the last several years -- almost back to its point prior to the 2001 terrorist attacks, spokeswoman Kira Kohrherr said. A $65-million renovation also boosted business, she added.

The far smaller Buckingham Hotel at 57th Street and Sixth Avenue is actually benefiting from the conversions -- and it, too, is adding a few employees. The neighborhood around the Buckingham has lost four hotels in the last 18 months, according to general manager Lisa Grossberg. The hotel's 30 employees soon won't be enough. "To give the proper service, we have to staff up," she said.

Despite those positive signs, significant hotel employment growth will never happen unless the city starts gaining hotel rooms at a faster clip, experts said. The supply here is up just 0.5 percent for the first five months of the year, according to Smith Travel Research.

"That's very, very low supply growth," said Jan Freitag, Smith Travel Research's director of client services.

Hotel jobs are particularly important in the city's economy, because they cover a range of salaries and skill levels.

"You can start without a tremendous amount of training and actually build a very decent salary for yourself," said Councilwoman Christine Quinn (D-Manhattan), who has sponsored legislation to stem hotel-condo conversions.

Although the conversion issue moved off the front burner after the Plaza Hotel's closing, Quinn said it's far from over. "Post-Plaza, we can't pretend the issue has been solved," she said.

Eventually, improved tourism should lead to some new hires. "You need housekeepers to clean all those rooms, and people to keep that going," Freitag said.

So far, though, it's not enough for job seekers like Simpson. "They say the economy is doing well and the hotels are doing well, but then they're closing down the hotels and the majority of us are out there searching and can't find nothing," Simpson said. "Something's wrong."

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To see more of Newsday, or to subscribe to the newspaper, go to http://www.newsday.com

Copyright (c) 2005, Newsday, Melville, N.Y.

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