Hotel Construction on the Rise in Orange County

John Jordan | September 2018

One of the newer hotel properties in Orange County is the 95-room Home 2 Suites in the Town of Wallkill

GOSHEN—The amount of new hotel construction of late in Orange County has been staggering with new projects either opened or in the development pipeline mainly at two key corridors—Route 17 and I-84 adjacent to the recently renamed New York Stewart International Airport in New Windsor.

According to statistics recently provided by the Orange County Partnership, a number of new hotels have opened of late adding more than 300 hotel rooms to the county’s existing stock. including a 95-room Home 2 Suites in the Town of Wallkill, a 108-room Sleep Inn in the Town of Wawayanda, an 81-room Sleep Inn in the Village of South Blooming Grove and a 105-room Hampton Inn & Suites in the Town of Newburgh.

In the pipeline are nearly 800 new hotel rooms at multiple properties, including: a 250-room Legoland Hotel in the Town of Goshen that is under construction, a 100-room Residence Inn in the Town of Wallkill, a 100-room yet-to-be-flagged hotel property to be developed by Long Island Hospitality in the Town of Goshen, a 100-room yet-to-be-flagged hotel by Goshen Hospitality, LLC also in the Town of Goshen, a 90-room Holiday Inn Express, currently under construction in the Town of Wallkill, a planned 150-room hotel in the Town of Woodbury and a planned hotel (size-yet-to-be-determined) in the Town of Goshen.

Also, along Route 17 there are another 1,343 hotel rooms that are open, under construction or in planning, including 332 rooms at the Resorts World Catskills complex and another 350 at the adjoining Katrite Hotel and Water Park.

Orange County Director of Tourism Amanda Dana said, “Historically, Orange County room counts in hotels have been low comparatively to the demand. Have you ever tried to get a hotel room during the fall foliage season? Tie that into weddings, graduations, athletic tournaments and general tourism and you will see how challenging that can be. Even without the Legoland New York theme park, the corridor is on the rise with visitors.”

Dana, who was the former director of business attraction and retention for the Orange County Partnership, added, “When we add the future Legoland project, it attracts developers all along this corridor.”

She added that not only are new hotel projects on the rise, “but chain restaurants are looking to land and capitalize on the millions of visitors that this county will attract.”

Construction has commenced on a mixed-use project on East Main Street in the Town of Wallkill that will include a new hotel and retail space.

Orange County Partnership President and CEO Maureen Halahan said that her economic development organization has also seen new hotel development investment interest in areas outside of Route 17 in Orange County.

When pressed for the reasons behind the dramatic rise in hotel development projects, she told Real Estate In-Depth, there are a couple of factors driving “the perfect storm” for hotel development. She noted several years ago, the Jehovah Witnesses purchased two hotels in Newburgh in connection with its relocation of its corporate headquarters to Warwick and several smaller facilities were repurposed for other uses by non-profit entities.

Since then, Woodbury Common completed a major expansion, Resorts World Catskills Casino opened for business in neighboring Sullivan County and Legoland New York secured approvals and commenced construction.

She said one factor driving hotel development is the expected influx of young families that will visit the Legoland resort beginning in 2020.

“When West Point has its graduation, you can’t get a room, when West Point plays its football games, you can’t get a room. Woodbury Common is packed all the time,” Halahan said.

Another contributor is the new casino. While some may opt to book high-cost rooms near the resort, Halahan said that hotel operators are banking on the belief that some customers will choose to book stays at less costly hotel properties still within an easy drive in Orange County.

The unbridled success of Norwegian Airlines has already prompted one planned hotel project on the New Windsor side of New York Stewart International Airport, she added.

A recent released study by Oxford Economics confirms that, during 2017, Orange County experienced an increase in tourism over the prior year. According to the report, Orange County accounted for 14% of all traveler tourism in the six-county Hudson Valley region which realized an overall 3.6% increase in traveler spending. Orange County was the only county in the region to see a full percentage point increase in its share of the regional traveler spending analysis compared to 2016.

The travel and tourism sector is a substantial and growing component of both the regional and state economy. It’s a $3.7-billion industry in the Hudson Valley region, supporting more than 58,000 jobs. The growth of businesses within this sector has positively impacted Orange County’s unemployment rate of 4.8%, bringing levels close to full employment. Furthermore, tourism-generated taxes saved an average $484 per Orange County household in 2017.

“This study supports what our tourism industry partners have been seeing and we are very optimistic about future growth in our local tourism economy,” said Dana. “For decades, landmarks like West Point and Storm King Art Center have lured visitors here. Woodbury Common Premium Outlets, one of the state’s biggest tourism attractions, accounts for an estimated 13 million visitors to Orange County annually. Combined with new projects, including the Legoland New York theme park and resort, an additional 7 million visitors are expected in the region following its expected 2020 opening.”

John Jordan
Editor, Real Estate In-Depth