US: Hospitality startup Sonder is continuing with plans to open its largest ever offering in new York.
The group has planned for a late spring or early summer 2020 opening, in spite of the threat posed to hospitality by the coronavirus.
Its latest property will open in a building owned by the Moinian group, a large scale New York real estate firm. Known as 2 Washington, the 13-storey property will be in the heart of the city’s financial district.
This news comes amidst a period of recession for hospitality with the industry possibly slowing down for the next 18 months. Roughly ten per cent of Moinian’s portfolio features is made up of hospitality businesses, with its largest offering of the W Hotel, also in the financial district.
Moinian VP of acquisitions and finance Michael Zarifpoor told Business Insider: “The whole hospitality industry, in general, should be hit, nothing particular. We are looking to wait this out overall.
“I don’t think it will be an extended kind of thing,” he added.
Many firms within the industry are facing turmoil due to the outbreak of COVID-19, including Vacasa, which announced a large-scale round of layoffs combined with a cut in executive pay. Interim CEO Matt Roberts has also opted not to receive compensation for the year.
Sonder, however has faith in its ability to weather the storm in the two months before their new property opens, as well as beyond. This is, in part, due to a recession-relief clause in 80 per cent of its signed leases, which allows it to lower its costs in case of a virus related downturn.
The startup’s last 12 months has seen it sell one of its first hybrid hotels in Denver for nearly triple the original price, before welcoming seasoned hospitality professional Frits van Paasschen to its board.
For more information, visit the Sonder website here.