London-based Quadrum Global is launching a micro-hotel brand after ending its collaboration with billionaire John Pritzker.
Quadrum executives Oleg Pavlov and Seth Schumer have launched Arlo, a micro-hotel brand that will bring 575 rooms — each spanning no more than 165 square feet — to two locations, Bloomberg reported. The hotels were initially going to be operated by Pritzker’s tommie, a San Francisco-based brand owned by Commune Hotels and Resorts, but Commune terminated its management agreements in June, as The Real Deal reported at the time.
The first location, Arlo Hudson Square at 231 Hudson Street, will have 325 rooms and open Sept. 6. The second Arlo at 11 East 31st Street, a 250-key hotel, will open in October. A room with twin bunk beds at Arlo Hudson Square is listed by Hotels.com for $199 a night, while a room with a queen bed goes for $399 a night.
“To make a project viable, one has to either charge significantly more money for the same room by positioning it as luxury, or one has to fit more rooms on the same land plot,” Pavlov told Bloomberg. “We essentially replicate a boutique hotel in a much smaller package.”
The hotel industry is showing signs of softening as supply seems to outshine demand. The average room rates in New York fell 3.3 percent this year to $237.93 and revenue per available room dropped 3.2 percent, according to STR, a firm that analyzes hotel data. At the same time, New York is adding 7,100 new hotel rooms this year and another 6,700 in 2017.
Arlo also already faces some competition in the micro-hotel game in Manhattan, including the Pod Hotel and Yotel.
Quadrum is currently co-developing a 500-key hotel on West 38th Street in the Garment District with Sam Chang. [Bloomberg] — Kathryn Brenzel