In New York, the Ritz-Carlton luxury hotel brand, billed as “the gold standard of hospitality,” is seeking to adjust its image in an attempt to attract young affluent travelers.

Part of Marriott International’s portfolio of 30 hotel brands that includes W and St. Regis, Ritz-Carlton on Tuesday opened its 106th global location. It stands at the corner of West 28th Street and Broadway on a fast-changing NoMad neighborhood block that counts among tenants small nondescript wholesale costume jewelry and apparel shops. The 50-story property, rising 500 feet above Manhattan’s streets and developed by New York-based Flag Luxury Group, includes 219 guest rooms, 31 suites, and 16 one- and two-bedroom penthouse residences.

While the hotel says it’s off to a strong start in terms of bookings, and key New York hospitality performance data has reached pandemic highs, it’s still making its debut at an uncertain time for the overall U.S. economy. Inflation and supply-chain disruptions are forcing some businesses to adjust as the city's economy still recovers from the fallout of the coronavirus.

Nevertheless, the property is setting itself apart from traditional Ritz-Carltons worldwide known for top-notch service and amenities, but often geared for an older crowd.

The NoMad hotel’s staff doesn’t wear nametags, but instead floral lapels are a nod to its location in the Flower District, Bastian Germer, general manager, said in an interview. In another twist, Michelin-starred chef José Andrés is behind all of the culinary venues and in-room dining, including Zaytinya, a Mediterranean restaurant on the ground floor.

In a few weeks, the hotel’s rooftop bar offering sweeping 270-degree views will open, followed by the debut later this year of Andrés’ Bazaar, which Ritz-Carlton described as a “high-end avant-garde dining destination.”

“The Ritz-Carlton is an iconic luxury brand, but it’s really generally known as a more traditional luxury hotel,” Germer said. “We want to change that image [not just with] the general look and feel of the hotel. This is quite a departure from the more traditional Ritz-Carlton … and moving to modern luxury. … We are really taking the brand to a different level with a specific appeal to a younger affluent clientele.”

Germer, a 27-plus-year luxury hospitality industry veteran who has been with Marriott for 12 years, was named general manager of the new location this year after running Marriott’s luxury Edition hotel nearby across from Madison Square Park. Germer said he has overseen other Ritz-Carltons in the past.

“If this had been just another Ritz-Carlton opening, I may not have been as interested,” Germer told CoStar News. “[I was] excited to be what I call Ritz-Carlton 2.0. It’s really a new generation of the Ritz-Carlton hotels. … It’s the first of its kind in North America.”

The location is about 2 miles from the brand’s only other New York site, near iconic Central Park in a more tourist-oriented district, and plays a key part in making what Germer described as a statement piece. The NoMad neighborhood, which got its name from being north of the popular Madison Square Park, is a frequent hangout for locals.

While the area is still dotted with wholesalers, trendy restaurants, bars, coffee shops and entertainment venues, as well as hip hotels, are increasingly defining the neighborhood. The site of the Ritz-Carlton, for its part, was once a two-story retail building and a garage before the buildings were demolished and construction started in the summer of 2018, a spokesperson told CoStar News.

Besides the Ritz-Carlton, NoMad also will see Virgin Hotels’ planned opening of its first New York location later this year, just one short block north. The Ned hotel recently opened on the site of the NoMad New York that permanently closed during the pandemic. Other upscale lodging options in the area include the Ace Hotel.

Broadway, from 25th to 30th streets, has seen increased ground-floor leasing activity ahead of expected hotel and commercial property openings this year, according to the Flatiron NoMad Partnership, a business improvement group overseeing both NoMad and the Flatiron neighborhood just to the south. In the first quarter, 30 ground-floor businesses opened or signed leases with a third of them located on Broadway from 26th to 28th streets in NoMad, the partnership’s data shows.

The crowds often observed in NoMad help explain the increased leasing activity. On a warm day, throngs of diners often can be seen eating outdoors at popular spots including The Smith and La Pecora Bianca while long lines stretching dozens deep form outside newly opened Anita Gelato. In another example, Swingers Crazy Golf, a popular adult mini-golf attraction from the United Kingdom that features three nine-hole courses, New York food brands and cocktails, recently opened its first New York location in the basement of the Virgin hotel.

“The center of the city has shifted,” Germer said. For locals, “NoMad has established itself as a wonderful place to be for dining and going out at night. The younger affluent traveler is coming down this way. … We are going to attract a lot of first-time travelers to New York. [But] we think the hotel will be greatly appreciated by guests who may have been to the city before. ... Everything is happening in [areas including] the West Village, Chelsea, Meatpacking, Flatiron and NoMad. That’s just where people want to be these days.”

The Ritz-Carlton’s opening comes as New York’s hard-hit hospitality sector, along with the rest of the U.S. market, has seen signs of rebound from the pandemic. New York’s hotel occupancy in June reached nearly 84%, still shy of the pre-pandemic 90.4% in June 2019, according to Romy Bhojwani, director of hospitality market analytics at CoStar Group.

However, New York hotels’ average daily rates have topped the 2019 levels each month since February with June’s rate of $299 alone 12% higher than the June 2019 level, he said.

“Luxury hotels like the Ritz-Carlton opening right when the market is seeing the highest rate coming out of the pandemic is great timing,” Bhojwani said. The luxury “segment has done very well through the pandemic. There hasn’t been much [price] pushback from consumers. I don't expect them to see any price resistance while consumer spending is still strong and household balance sheets remain strong, particularly in the upper end of the demographic.”

The average daily rate of luxury hotels in New York has jumped at a faster pace than that of the average of all types across the city. The average rate among luxury hotels in New York in the four weeks through July 9 increased 34% to $543 from $405 during the same time in 2019, more than double the 16% increase of the city average to $288, according to hospitality analytics firm STR, a unit of CoStar Group.

In a telling sign of demand for the NoMad area, luxury hotels’ average daily rate in the Midtown South market, which includes NoMad, surged more than 50% to $521 from $343 during the same period pre-pandemic, STR data shows.

“We have a phenomenal amount of interest,” Germer said. “We are going to fill the hotel relatively quickly, and by September, we expect it to be fully committed.”

The Ritz-Carlton is the first top-tier “international branded hotel” in the NoMad neighborhood, he said, and those it considers as rivals, including Four Seasons and Mandarin Oriental, aren’t in the area.

Starting rates for the new Ritz-Carlton in August will be $1,000 a night, the hotel spokesperson told CoStar News.

With inflation, concerns about any potential recession and other economic fears on consumers’ minds, it remains to be seen whether spending, including that from luxury travelers, may eventually taper off. Research firm Tourism Economics, part of analystics firm Oxford Economics, recently cut its real growth U.S. gross domestic products forecasts for both this year and next.

“There’s a lot of debate around when things will start to slow down,” Bhojwani said.

Supply chain bottlenecks, meanwhile, remain an industry watchpoint. They led the Ritz-Carlton’s NoMad opening date to be delayed several times, according to Germer.

Still, Bhojwani said the Ritz-Carlton’s game plan of trying to attract local guests as well as tourists makes sense.

“Hotel brands don’t want to offer the same old hotel restaurants that locals don’t go to,” he said. “They want to offer restaurants for locals to frequent. It’s smart to partner with someone like José [Andrés]. It will be attractive to local residents. If it was just another hotel restaurant ... that hotel customer may just go elsewhere. … That’s a loss of revenue.”