NEW YORK—Maybe because its DNA has NY in it, lifestyle hotel brand NYLO has given notice that if the lodging industry thought it was out as a player, it can fuggeddaboutit.
The scrappy brand, after being considered stagnant in recent years by many hoteliers in terms of its growth, debuted its fifth hotel—and first franchised property—earlier this month, here on Manhattan’s trendy Upper West Side.
The 285-key hotel at 77 St. and Broadway is the second property in as many years that NYLO Hotels, LLC, has carved out in a major market via conversion.
In September 2012, the company debuted the NYLO Dallas South Side, a 76-room adaptive reuse of the 101-year-old Dallas Coffin Co. Building; the NYLO New York City was created on the bones of the independent On The Ave. hotel.
And NYLO is continuing its push, with plans farther north in New York’ Rockland County where it is developing a 132-room hotel in Nyack that is slated to open next year.
Nearing the 10-year-mark in business, NYLO is being “fairly selective” in what it’s now choosing to do, according to President/CEO Michael Mueller. “We were very aggressive in the beginning.”
Indeed. NYLO was among the pioneering “emerging brands” that attracted much of the industry’s (and designers’) attention in 2005, and in a heated market clamoring for new, new, new, NYLO envisioned 50 hotels by 2010.
It also counted Lehman Brothers Holdings among its equity investors and prior to the group’s filing for bankruptcy, had counted on it as a strategic partner to help establish a strong foundation of about a dozen new-build hotels for the brand. At the time, then-CEO John Russell indicated the company would survive the rough waters.
NYLO did open its first hotel in Plano, TX, in December 2007, and actually began crafting a brand extension, XP by NYLO, but a year later, like the rest of the industry, was enmeshed in the throes of the recession.
“We had dozens of franchise agreements and management agreements with third parties signed and then the recession hit and like everybody, the music just stopped,” said Mueller.
It had so much potential that did not come to fruition perhaps caused critics to dismiss the brand; however, Mueller said the company, in addition to opening its third corporate-owned, Lehman-backed NYLO (in Las Colinas, TX) in September 2009, spent that year and 2010 restructuring: “fighting fires, cutting costs, restructuring debt where necessary, restructuring our team, expanding our development group and really focusing on managing what we had and getting the hotels we had in the pipeline finished and opened.” The leaner organization also left Atlanta and relocated to Dallas, and given the lending market, began eyeing conversion opportunities instead of being a strictly new-construction brand.
“We’ve been working on conversions for a number of reasons: one, because new-build opportunities are rare these days; it’s very difficult to get financing for new-builds; two, our brand—the loft, industrial style—fits so well with some of these older buildings, whether they’re warehouses or factories, office buildings or even a hotel,” said Mueller.
The move has enabled NYLO to gain momentum again, witnessed by the Dallas and NYC openings within a year of each other (the Broadway hotel soft opened in August).
“People who say we’re slow are competitors,” said Mueller. “If you look at what we’ve done in the past few years relative to what they’ve done, I’d make an argument—based on our size— we’ve outperformed the bigger hotel companies both in terms of growth, RevPAR growth, and a lot of other factors. We never disappeared; we’ve always been here. We may have been a little more quite.”
Mueller said the Manhattan property has been in the works since 2011 but that the company has “always” wanted to be in New York City. “We worked on several projects in New York and had the recession not happened, we’d have been there a lot sooner.”
The New York City property also is NYLO’s first franchised hotel, the owner being Lehman Brothers Holdings (which emerged from bankruptcy). Highgate Hotels, which managed the now-converted On The Ave. hotel, continues in that role.
The hotel was completely renovated to reflect NYLO’s core premise of cutting-edge design, in this case drawing from the industrial jazz era.
Architect/interior design firm Stonehill & Taylor and consultant Stephane Dupoux of Depoux Designs, considered the “creative force” behind NYLO Hotels, collaborated on the hotel.
NYLO New York City is introducing a new technology-driven concierge and an updated take on hotel mini-bars. The hotel offers a virtual concierge service by Monscierge and the hotel’s LOCL Bar offers a selection of New York-centric items, full-service bar and a piano lounge with live entertainment. A library with a fireplace that was kept from the hotel’s original architecture, which dates to 1910, is another feature.
Restaurant RedFarm offers contemporary Chinese cuisine and restaurant Serafina brings Northern Italian cuisine to guests and locals.
The executive felt there was an advantage to having the NYLO brand in the area, as the neighborhood is peppered with independent hotels. “The Upper West Side location is one that’s kind of been ignored by hotel companies over the years. Everybody’s familiar with Midtown and more recently downtown: SoHo has gotten hot; Meatpacking has gotten hot; just about every district has gotten hot except the Upper West Side,” said Mueller. “But it’s very convenient to stay for business travelers; it’s predominantly a leisure market right now. I see that changing as we get involved, as a lot of our clients are business clients. We’re very strong leisure also but I think there’s a very great potential for more corporate transient. It’s a great location.”
Another location NYLO sees as key is in the village of Nyack, which is connected via The Governor Malcolm Wilson Tappan Zee Bridge over the Hudson River to Tarrytown in Westchester County (considered a bedroom community to metropolitan New York).
“It’s a nice little village with colleges and universities around the area and it’s kind of the social hub for those universities. It’s got a lot of bars and restaurants; it’s very active. There’s also a marina. It’s very picturesque,” said the CEO, adding, “It’s got built-in demand and it’s a great little place to get out of the city to. There are hotels up there, but there’s no boutique hotel up in that area.”
A (currently) $3.9 billion plan to replace the Tappen Zee Bridge is also in the works, which could drive additional demand.
The project team for the property, which is using some materials and the footprint of an existing building, includes Michael Yanko and Kerry Wellington, principals of WY Management in Nyack; Joseph Siegal and Hans Erdenberger, principals of Environetics Group Architects, PC; and Depoux Designs.
Among the key features for the property will be space to attract social events, such as weddings, and a studio space that will house entertainers doing a live radio broadcast that will be viewable from the lobby.
“And a really nice steakhouse with a bar and a pool outside…it’ll be a nice leisure destination as well as a good commercial destination,” said the executive.
NYLO Nyack will be a management agreement, said Mueller, noting it’s one of the key ways the company anticipates growing.
“We will entertain franchise agreements with really experienced operators…our preference is to manage where we can,” said the CEO.
And with a more-robust outlook for the industry overall, Mueller said NYLO is looking at deals all over the country. “It’s always been our business plan to develop all over the United States, both in gateway cities and secondary cities,” he said, adding: “We’re a brand option anywhere in the States, just about, for the right project, for a good project that has character.”
And yes. XP by NYLO also is expected to rise.
“We’ve kind of reimagined the concept and we’re working on several projects where we would convert existing, tired, limited-service hotels to XP by NYLOs,” said Mueller. “There’s some of those in the pipeline…but I can’t talk about where. Not yet.”