Micro-room hotels have become a more prominent part of New York’s overall room supply, and are drawing a wider array of brands and investors while upending the status quo for long-term players in the market.
Loosely defined as properties with bathroom-inclusive rooms that average less than 200 square feet, micro-room hotels once were solely the arena of local players such as Pod Hotels and Arlo Hotels, as well as European imports such as Yotel and CitizenM. Now, larger U.S. hotel companies are looking to expand their fledgling brands within the most lucrative U.S. market.
For example, lifestyle-hotelier Ace Hotel Group debuted its Sister City offshoot in Manhattan’s Bowery last February, and Hilton plans to bring its new Motto by Hilton micro-brand (average room size: 163 square feet) to Chelsea next year.
Also emblematic of this trend, Marriott International’s European-born Moxy brand has added four Manhattan properties totaling more than 1,500 rooms within the past three years, including new hotels in Chelsea and the East Village last year. Another Moxy is slated for the Lower East Side next year.
In the meantime, the specialists are trying to hold their ground. Pod Hotels, which debuted in Midtown East in 2007, opened its largest property, Pod Times Square—with 665 rooms and 45 larger “Pod Pads” —in early 2018. Amsterdam-based CitizenM, which opened its first New York hotel near Times Square in 2014, opened a 300-room Bowery property in 2018.
Micro-rooms now account for about 5% of New York City’s inventory of 125,000-plus hotel rooms.
“There’s a component of folks who are becoming OK with giving up space in the guestroom for more activity in common areas, and are more willing to pay close to what they’re paying for a normal room,” said Mark VanStekelenburg, New York-based managing director at CBRE Hotels.
“If you look at a Hilton Garden Inn or an Aloft, you’ll have a guest room of 200 to 300 square feet. If you’re able to build one-and-a-half to two rooms in the same space but you’re getting 90% of the rate, it’s a win-win.”
