United States -  Long Island

Overview:

Extending east-northeast from New York Harbor into the Atlantic Ocean, Long Island comprises four counties: Kings and Queens (these form the New York City boroughs of Brooklyn and Queens, respectively) to the west, and Nassau and Suffolk to the east. Two of the New York City metropolitan area's three busiest airports, JFK International Airport and LaGuardia Airport, are located on the Island. Long Island has played a prominent role in scientific research and in engineering and is home to the Brookhaven National Laboratory (nuclear physics), a major U.S. Department of Energy research institution. Long Island is also home to the Cold Spring Harbor Laboratory, a renowned biomedical research facility, and Stony Brook University (SUNY) and New York Institute of Technology, which both conduct advanced medical and technology research. Moreover, Long Island features the Hauppauge Industrial Park, housing over 1,300 companies and employing more than 71,000 Long Islanders.
 
Limited inventories of sites suitable for hotel development and high land and construction costs have continued to suppress supply growth in most areas of Long Island. Combined with the complex approval processes that characterize most municipalities in the area, this causes long lead times for new hotel projects. As a result, supply growth will continue to be minimal in the near term. Both occupancy and average rate remained relatively flat for the market in 2015, indicative of a stable corporate climate. While the western end of Long Island continues to benefit from a significant corporate presence, the eastern end of the island is characterized by a high degree of seasonality and remains highly dependent on leisure business/seasonal rate pressure to sustain its year-end performance.
 
Moderate demand growth is forecast in the near term. With occupancy expected to remain in the low 70% range, revenue growth will be driven by average rate increases. However, competitive pressure from the continual increases in supply in Brooklyn and Queens has also tempered the average-rate-growth potential of the Long Island market. Following a slowdown in 2015, New York City continues to record fewer compression nights (occupancy greater than 95%) than in previous years.
 
Transaction activity in the market continues to be limited, with the majority of transactions involving smaller and/or older assets. Following the acquisitions of the Long Island Marriott in Uniondale and the Hyatt Regency Long Island, the market has registered a lack of any full-service hotel transfers. Examples of lower-profile properties sold in 2015 include the Wingate Inn Commack and the Holiday Inn Express Roslyn Manhasset, which reopened in 2015 after a period of closure for significant renovation and rebranding. Data illustrate a renewed focus on desirable beach communities, as indicated by the sales of the Bentley Hotel and Capri Hotel in Southampton, as well as the Danfords Hotel & Marina in Westhampton.
 
* The HVI is an index, a statistical concept reflecting a measure of the difference in the magnitude of a group of related variables compared with a base period. As such, it is a measure of broad market trends, rather than a conclusion as to the specific value of any asset, and cannot be applied to an individual asset. A good comparison is the Consumer Price Index. While this index provides a reliable measure of the overall rate of inflation in a region, it does not indicate how the price of milk has changed at your grocery store. So how can the HVI be of use to an individual investor? Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent big picture data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Valuation Trends and Predictions:

Long Island United States
Previous Year +1% (42 of 71) +1% (49 of 71)
Growth in 2017 +2% (23 of 71) +2% (36 of 71)
Growth in next 3 years +11% (28 of 71) +10% (36 of 71)

Change In Value For Market:

Long Island RevPar % Change

For more information, please contact:

Anne Lloyd-Jones, CRE
alloyd-jones@hvs.com
  • +1 516 248-8828 (w)
Chris Fernandes
cfernandes@hvs.com
  • +1 603 305-6834 (w)