Two Famous New York Hotels Plan Their Comebacks

The Four Seasons in Midtown Manhattan has been closed for three years while the property’s owner and Four Seasons Hotels & Resorts, which managed the hotel, have been locked in a contract dispute. 

At the famous Plaza Hotel, a couple of blocks away by Central Park, much of the property remains closed to the public, including the famous Oak Room bar and the basement space previously occupied by the Todd English food hall.

Now, this looks poised to change. Four Seasons and Ty Warner, the billionaire owner of the Midtown hotel, are advancing toward an agreement for a new contract that would reopen the 368-room luxury hotel, according to people familiar with the matter. No deal has concluded but one could be reached before the end of the summer, these people said.

An agreement could also directly determine the winner of a competition to take over management of the Plaza, setting the stage for a planned renovation and reopening or reimagining of the closed sections. 

The Four Seasons is a finalist for the Plaza job along with Raffles Hotels & Resorts, according to people familiar with the matter. Raffles is a Paris-based luxury-hotel operator that is moving its headquarters to New York City.

If Four Seasons reopens its Midtown flagship, Raffles is expected to prevail as the new manager of the Plaza hotel, these people said. 

The Plaza is owned by Katara Hospitality, which owns and operates hotels for the Qatar government and acquired the Plaza in 2018. “There is nothing definitive at this stage as it’s part of our routine evaluation we undertake across our portfolio,” a Katara representative said about the Plaza. 

Both properties are poised to capitalize on the powerful rebound in New York City’s luxury hotel business. After struggling during the earlier part of the pandemic, room rates and occupancy levels at these high-end properties have soared as tourists start to return and business travel shows signs of recovery. 

New York luxury segment’s revenue per available room year-to-date stands at $334.45, according to data firm STR. That is more than three times the RevPAR levels during the same period in 2021, and even above the $296.69 RevPAR for the same period in 2019, STR said.

The Four Seasons hotel, a 52-story tower designed by I.M. Pei, had been one of New York City’s premier hotels since it opened in 1993. The hotel’s Ty Warner Penthouse suite used to command nightly room rates of more than $50,000, offering guests over 4,000 square feet of space and panoramic views of the city. 

Warner, who made his fortune through Beanie Babies stuffed toys, closed the property to the public in 2020. For a time, he allowed doctors and nurses treating Covid-19 patients to stay there without charge. Months later, he closed the property while trying to negotiate new terms on his contract with Four Seasons, according to people familiar with the matter.

Frustrated by lack of progress in negotiations, Four Seasons turned its attention to competing for the Plaza, these people said. 

Both hotels need some work after extended fallow periods. The Four Seasons will require several months to clean and prepare the hotel for reopening, say people with knowledge of the matter. Katara is planning to spend hundreds of millions of dollars renovating the Plaza, say people familiar with Katara’s thinking. The Plaza Hotel lost hundreds of rooms when a previous owner combined many of the original 800 guest rooms and suites into luxury condos.

A final wild card in the process is that Katara has a new chief executive officer. He could decide to restart the search process for a new Plaza Hotel operator if he is unhappy with the two finalists, according to a person familiar with the matter. 

Write to Craig Karmin at [email protected]