Tourism, Business Travel Spark Hike in New Hotel Construction

John Jordan | September 2015

GOSHEN—Another sign that the Orange County economy is growing comes from the hotel-tourism sector as lodging developers are now proposing to build new hotel properties to meet the increased demand by tourists and business travelers seeking overnight accommodations.

In addition to the fact that a host of commercial and industrial businesses are announcing plans to construct or locate operations in Orange County, Orange County has also seen a sharp spike in tourism revenue.

Recently, Orange County Executive Steven Neuhaus announced that tourism spending in the county increased by $15 million in 2014 as compared to 2013.

According to New York State, Orange County’s tourism increased 3.5% in 2014 from the previous year. The total tourism spending in 2014 was $450,399,000, an increase of $15,129,000 from 2013’s total of  $435,270,000. In addition, the county’s hotel’s sales tax increased from $2,965,586 in 2013 to $3,085,121 last year—an increase of 4%. The hotel sales tax has increased for five straight years, Orange County officials noted.

“I have been a strong advocate of promoting tourism in Orange County since I took office,” Neuhaus said. “The continued success of our Tourism Department has helped economic development in the County and strengthened our economy.  It creates and sustains jobs, and supports a vibrant business environment.”

On the tourist side, the county has a host of attractions that fill the county’s hotel facilities. According to Susan Hawvermale, Orange County’s Director of Tourism, there are approximately 51 hotels that offer a total of 3,200 rooms.

Orange County offers a plethora of restaurants, parks, golf courses, biking trails, museums, craft fairs, wineries, farmer’s markets and historic sites. The county is home to popular landmarks such as West Point and Woodbury Common Premium Outlets.

“Our rise in visitors each year comes as no surprise,” Hawvermale said. “People are discovering Orange County’s international destinations as well as the wide range of places and pursuits that appeal to everyone from hikers to historians.”

Orange County Executive Neuhaus added, “Orange County has become a tourist attraction for people from around the world and for good reason. We have so much to highlight and showcase to visitors. We have become an attractive tourist destination and we expect to continue to flourish.”

At present, there are three hotel projects in development including a 95-room Home2 Suites by Hilton hotel to be built by JCA Hospitality. The 64,000-square-foot, $10-million project in the Town of Wallkill is being constructed at the site of the former Town Hall for the Town of Wallkill on Route 211. Chet Patel, a principal of JCA Hospitality, said that site work has begun. Construction of the new hotel is expected to begin in earnest in the next month or so.

In addition, a 108-room Sleep Inn hotel in New Hampton is also in the works. The 50,000-square-foot property will cost approximately $6.3 million to build. In addition, an 80-room Sleep Inn hotel is also planned for South Blooming Grove. That hotel is projected to cost approximately $8 million to complete, according to Bill Fioravanti, director of business attraction for the Orange County Partnership. There are also some hotel development projects in the pipeline in the Town of Newburgh and in Highland Falls that could break ground in the near future.

Hawvermale said that both tourism and business demand is driving new hotel development. She said that the county is currently underserved in terms of available hotel rooms and is hopeful that in the future a more diverse assortment of hotel product will become available, particularly in terms of new luxury hotel properties. She said that the Department of Tourism has been aggressively marketing Orange County as an overnight tourism destination to not only outlets in the New York metro area, but also in places like Philadelphia and Boston, and that those marketing efforts are producing dividends.

The Orange County Partnership’s Fioravanti pointed to some other issues that have caused an increase in new hotel projects in Orange County. He noted that the county has an aging inventory of hotel properties and several large hotels in the county were sold and converted to other uses recently. He also said that the growth in a number of burgeoning business sectors, particularly health care, is also driving hotel occupancies higher and prompting new hospitality development projects.

In 2015 the 119-room Hilton Garden Inn next to Orange County Choppers and in 2014 the 116-room Hampton Inn on Route 300, both were sold to the Jehovah’s Witnesses, which is currently building its new world headquarters in Warwick.

The demand for new hotels will only get stronger once construction of the new Montreign Resort Casino in Sullivan County begins in earnest. Orange County is expecting significant business to come from the casino once it opens and that should also result in demand for additional hotel rooms in the county.

John Jordan
Editor, Real Estate In-Depth