Jones Lang LaSalle Hotels today released its research study Manhattan Hotel Rooftop Bars and Penthouses – December 2011, which reveals fascinating insights into the impact rooftop bars can have on hotels in the Big Apple. The report is based on a series of interviews with dominant players in the field and firm data, and details the operational upside that rooftop bars and penthouses can provide hotel owners.
The bar climbs higher
Thirty-five hotels totaling 9,600 rooms in New York City feature a rooftop bar, representing 12 percent of New York City’s total hotel room supply. Lifestyle boutique hotels are still the most prevalent properties offering rooftop bars; however, international hotel chains have entered the rooftop bar arena, representing nearly a third of the total number of rooms.
“In recent years, hotel owners and developers have begun to embrace the rooftop bar strategy en masse,” said Amelia Lim, Executive Vice President of Jones Lang LaSalle Hotels. “New York continues to be at the forefront with its ever-expanding and active rooftop bar scene. The concept has caught on in other U.S. gateway markets like Miami, Chicago, Washington, DC and Los Angeles, as well as international hubs.”
Rooftops can be a balance sheet booster
Rooftop bars have proven to be highly profitable venues, using what is typically non-revenue producing space. Revenues can reach up to $120 per square foot per month in peak season, with departmental profit potential of up to 50 percent.
“Rooftop bars and lounges have become a game changer and an iconic feature for hotels in densely built-up markets. They often represent a substantial profit center, delivering a high return on investment,” added Lim. “Situated high above the hustle and bustle, rooftop bars consistently draw in a crowd because they are simply a great place to escape, enjoy the view and have a drink and a bite.”
Creating an urban sanctuary
Development capacity constraints are a hallmark of high barrier-to-entry markets. Rooftop bars are a creative way to maximize the development capacity of a site or an existing building within such markets. With more than 42 percent of the rooftop bars in New York constructed atop pre-war buildings, conversion
of flat roofs or programming space into a ground-up project is becoming increasingly popular. When thinking about constructing a rooftop bar, keep in mind that not all markets can sustain this type of development.
“In any real estate development, careful planning for accessibility, design, security and zoning weighs in as a major factor, but this is especially true for rooftop bars,” said Pete Dordick, Vice President of Project and Development Services for Jones Lang LaSalle. “We expect to see an uptick in rooftop developments and surprising concepts enter the market, as boutique and independent operators continue to be incentivized to push the envelope and test the boundaries on existing concepts.”
Jones Lang LaSalle Hotels’ report describes the five factors that make a successful rooftop bar scene including space constrained urban environment, high rising building with flat roofs, wide party scenes, permitting climate and breathtaking views. It also details the three main operational categories that work for hotel rooftops including penthouses, bar and lounge rooftops and guest-only bars and includes a developer’s checklist. To read the firm’s full rooftop bar and penthouse analysis, click here: http://www.joneslanglasallehotels.com
About Jones Lang LaSalle Hotels
Jones Lang LaSalle Hotels, the first and leading global hotel investment services firm, is uniquely positioned to provide the depth and breadth of advice required by hotel investor and operator clients, through a robust and integrated local network. In 2010, Jones Lang LaSalle Hotels provided sale, purchase and financing advice on $4.1 billion worth of transactions globally. In addition, advisory and valuation services were provided on over 1,000 assignments. The global team comprises over 225 hotel specialists, operating from 39 offices in 20 countries. The firm's advice is supported by a dedicated global research team, which produced 70 publications in 2010 in addition to client research. Jones Lang LaSalle Hotels' services span the hospitality spectrum; from luxury single assets and large portfolios to select service and budget hotels, resorts and pubs. Services include investment sales, mergers and acquisitions, capital raising, valuation and appraisal, asset management, strategic planning, operator selection, management contract negotiation, consulting, industry research and project development services. Jones Lang LaSalle Hotels' clients have access to the resources of its parent company, Jones Lang LaSalle (NYSE: JLL). www.joneslanglasallehotels.com