From NYC to LA: Hotels Open Profitable Rooftop Bars

When it comes to hotel bars, the sky has no limits.

Conrad Hotels and Resorts rooftop bar.
Source: Conrad Hotels and Resorts
Conrad Hotels and Resorts rooftop bar.

Rooftop bars are increasingly showing up in hotels from New York to New Orleans to Los Angeles, and they're getting more elaborate with their decor and food and cocktail menus.

Some even have heaters or fire pits so they can stay open in the winter.

Pioneered by boutique hotels, rooftop bars are popping up at bigger hotel chains as part of a larger trend of taking any space available and turning it into social areas where food and drink can be sold.

Among the newer bars:

The Conrad New York recently opened its rooftop bar, Loopy Doopy, 16 stories above downtown Battery Park City. It claims to be the only rooftop bar in the United States to serve prosecco on tap. Revelers can also indulge in alcoholic Popsicle sticks.

The Raffaello Hotel in Chicago recently opened Drumbar on its 18th floor, a speakeasy-style lounge with an extensive cocktail menu and collection of bourbon, scotch and whiskey.

The Saint Hotel in New Orleans, part of Marriott's Autograph Collection, will soon open Halo, a rooftop lounge with panoramic views of the city and a misting system for daytime sunbathers. An in-house DJ will entertain in the evening, and the menu will feature gourmet fare such as lobster corn dogs.

The Ritz-Carlton Georgetown in Washington, D.C., turned a once-empty patio into a garden where guests and neighbors can watch movies every Friday night or drink at a Sunday garden party this summer.

The Dream Downtown in New York has covered the outdoor terrace of its rooftop lounge PH-D from October to April to keep it open during the winter. With views of all of uptown New York, the venue plays host to "Sunset Saturday" parties.

"The idea of moving the party outdoors, weather permitting, or even with heating lamps when it's cold, creates buzz," says Chekitan Dev, associate professor of strategic marketing and brand management at Cornell University's School of Hotel Administration.

And buzz usually leads to sales. The industry typically measures success by how much revenue a hotel makes per room.

But a new standard of revenue per square foot has emerged, Dev says. As a result, it no longer makes sense to reserve rooftops for heating and cooling systems. "There tends to be a lot of underutilized space in hotels," Dev says. "What hotels have realized is there are better ways to use this space."

According to Jones Lang LaSalle Hotels, a commercial real estate services firm, revenue for hotel bars can reach up to $120 per square foot per month in peak season, with profits of up to 50 percent.

Jared Galbut, managing principal of Menin Hotels, which owns the Raffaello, says the new lounge has been a hit with guests and locals alike.

Rooftops, he says, have "become dominant places for entertainment in places like New York and Chicago."

People want to drink in trendy places and they want to drink outdoors, says Matt Strauss, director of nightlife at Dream. "Being able to relax after work with a great cocktail while looking over the city you conquered that day … is something people greatly enjoy."

With additional reporting by Barbara DeLollis.