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Chic hotels at budget prices

BY FARNOOSH TORABI | Special to amNewYork

August 7, 2006

Owner Hank Freid in the lobby lounge of The Marrakech Hotel on Broadway at 103rd Street. (Photo by Jefferson Siegel / August 6, 2006)

Though hotels are hardly considered small business, Bronx-born hotelier Hank Freid's approach to the lodging industry in Manhattan is in the minority.

With city hotel rooms averaging $230 a night, Freid's newly renovated budget hotel, The Marrakech, on 2688 Broadway and 103rd Street, offers travelers a chic experience at a fraction of the price.

"It's a W-type look, but you're not paying $300, $400 a night," Freid said. (By the way, the average hotel room everywhere else in the country is $90 per night.)

Between 2002 and 2005, the hotel was under contract to provide exclusive affordable housing to the city's HIV/AIDS Services Administration. Before that it was a no-frills economy hotel called The Malibu. Today, it's reverted back to a tourist hotel with a Moroccan theme and upgraded amenities that have become a big hit with the 35-and-under set traveling from Europe.

"The property is nothing like it used to be before," Freid said.

Guests won't sleep in Egyptian cotton and receive chocolates on their pillows -- perks that Manhattan's ritzier hotels offer. They're also several subway stops away from tourist attractions like Times Square and Rockefeller Center. But certain cash-strapped tourists gladly make those concessions considering most Marrakech rooms start at about $129 per night.

"With the dollar so weak, it makes it really, really affordable," Fried said. In fact, the hotel has sold out every weekend so far this summer, and August looks to be equally as busy, he said.

From economy to luxury-priced, the city's overall hotel industry is on a strong path to recovery since 9/11. According to hotel consulting firm HVS International, the industry should see a sales increase of 12% this year.

While Freid owns four other hotels in Manhattan, ranging from budget to luxury, his emphasis on low-fare lodging has made him stand out in a competitive hotel climate. A law school dropout, Freid started his hotels career in the early 1970s, when the barriers to entry were relatively low. Now, there's limited space to build, and existing hotels are being converted into condominiums. Ten hotels closed for full or partial condo conversions from April 2002 through 2005.

That's almost 4% of overall inventory, according to HVS International.

"When I got into the business, hotels weren't hot," said Fried, who partnered to open his first hotel in 1973, investing $15,000. Today, he owns five lodgings, in addition to a hotel consulting business with annual revenues of about $40 million.

Next year he is slated to open a luxury hotel in midtown called Sanctuary.

But the immediate success of The Marrakech has also inspired Freid to expand his budget-chic concept. He is considering opening low-cost hotels on the Upper West Side and the Lower East Side. "We're building the company so we can solicit [visitors] from a one-star to a five-star property. This way, everyone is a potential customer."

Farnoosh Torabi is a video correspondent for thestreet.com. amSmallBusiness@gmail.com.