New York City's first gay hotel, THE OUT NYC, opened for business on Thursday, MSNBC Travel reported.

Located in Hell's Kitchen between 10th and 11th Avenues, THE OUT NYC, designed by Paul Dominguez, includes 105 rooms and is part of a $30 million renovation of a former three-story Travel Lodge. The complex will also house a gym and a restaurant – KITCHIN – three courtyards and an 11,000-square-foot nightclub – XL Nightclub.

The hotel will be moderately priced, starting at $250 a night, and offer eight “sleep shares,” shared rooms with privacy curtains from $99 per person.

The project is being financed by Parkview Developers, which was founded in 2003 by gay couple Ian Reisner and Mati Weiderpass.

“I had a vision five years ago,” to create a conveniently located gay hotel that would also “be a relaxing home base resort-style retreat where guests can stay, eat and play,” Reisner told MSNBC.

Henry H. Harteveldt, co-founder of the Atmosphere Research Group, a market research company, said he expects the hotel will face a number of challenges, including competing against mainstream hotels which are increasingly marketing to the gay community.