"Lodging Hospitality" reports favorable growth in N.O. since Katrina

June 28 2011 | Latest News

An interview with Mavis Early, Fred Sawyers, and Nikki Moon...

Jun 24, 2011

By Paris Wolfe

If there was any doubt New Orleans was back, 2010 Super Bowl LXIV showed the world a thriving post-Katrina city. A win by the New Orleans Saints sent city images viral. Katrina, as in Hurricane Katrina, hit the city six years ago on Aug. 29, 2005. The hurricane was one of the five deadliest and sixth strongest in the history of the U.S. One thousand, eight hundred and twenty-six people died in the storm. Its $81-billion damage along the Gulf Coast is legendary.

Of the media coverage of New Orleans celebrating the Saints’ Super Bowl win, Mavis Early, executive director of the Greater New Orleans Hotel & Lodging Association, says, “All that visibility sent a clear message that New Orleans was fine now. It dispelled any misconception that New Orleans was still underwater. It showed that you could come to New Orleans and have as good a time as you’ve ever had.”

The coverage of New Orleans’ celebration — the Super Bowl itself was in Miami — had a phenomenal effect, says Fred Sawyers, complex manager of the Hilton New Orleans Riverside and Doubletree by Hilton New Orleans. “It got it out there, that New Orleans was OK now, through vignettes of downtown and pictures of people pouring out of French Quarter celebrating in the streets.”

The Super Bowl punctuated what’s been going on during the past six years: the rebuilding of New Orleans’ hospitality industry. Finally, 2011 just may be the year travel and tourism numbers catch up with pre-storm (and pre-recession) levels.

Safely Above Water
“Things have been steadily improving over the past few years,” says Nikki Moon, vice president of convention sales for the New Orleans Metropolitan Convention and Visitors Bureau. “I think New Orleans was a city people shied away from for the past few years. They were a little skittish. Now they’ve seen good press and the positive things that are happening. They know it is a good, safe place to go. The numbers are showing it.”

The city’s performance ranks in the top 25 markets, according to Smith Travel Research (STR), with April 2011 occupancies at 75.9%, average daily rate at $137.70 and RevPAR at $104.46. While April is traditionally a busy month for the city, its average daily rate was the highest monthly rate in the last seven years with just three exceptions.

Overall, according to the New Orleans Metropolitan Convention and Visitors Bureau, visitor spending hit its highest in 2010 — $5.3 billion. It was only $4.9 billion in 2004. And, it was up $1.1 billion or 23.6%, over 2009 spending, according to the 2010 New Orleans Visitor Profile survey conducted by the University of New Orleans Hospitality Research Center.

Meanwhile, the number of visitors is creeping closer to pre-storm levels. In 2004, a whopping 10.5 million people visited the city. In 2010, those numbers hit 8.3 million.

And the city has aggressive plans to grow those numbers. In 2010, leaders launched a master plan with the goal of attracting 13.7 million visitors and generating $11 billion by 2018, the city’s tri-centennial.

For that to be possible, the city will have to pass its pre-Katrina room inventory. Before Katrina hit, the city had 38,838 rooms. Just days after Katrina those numbers dipped to 11,944 for September 2005, climbing to 27,458 by year’s end. As of April 2011, those numbers were stalled at 35,194, according to STR.

It may not be long before the old numbers are surpassed. Early says 17 hotels are in preplanning stages. The most significant addition to the city’s room inventory will happen in October when the “new” Hyatt Regency New Orleans restores 1,193 rooms, including 95 suites, to the market.

Hyatt Reborn
The Hyatt is, perhaps, one of the most iconic stories, in the city’s rebirth. The city’s command center in post-storm months, the 32-story hotel adjacent to the Superdome went dark for nearly six years.

“As an integral part of New Orleans’ downtown for more than 30 years, Hyatt Regency New Orleans was one of the most visual representations of Hurricane Katrina’s aftermath,” says Chuck Floyd, chief operating officer, North America, Hyatt Hotels Corp.

After a $275-million redesign and revitalization it will reopen with double — 200,000 square feet — the meeting space. This includes two 25,000-square-foot ballrooms, 64 meeting and banquet rooms, 21 executive-level meeting rooms, seven permanent boardrooms, and more than 80,000-square-feet of exhibition space, highlighted by a new 50,000-square-foot exhibit hall. A 300-seat, celebrity-chef-branded restaurant will be announced soon.

The impressive food and beverage offerings will include a 360-seat, full-service restaurant with private and semi-private dining rooms; 210-seat media/action bar with private and semi-private lounges; 70-seat atrium bar; 60-seat Starbucks; 24-hour fresh market.

“When I say we’ve thought of everything, we have,” says General Manager Michael Smith. “This is not a renovation. When people come in now they’ll see something transformational.”

Chris Robertson, a managing partner of Poydras Hotel Members, emphasizes the amount of research planning that went into making that happen. Poydras owns the hotel. “We went back to start benchmarking to be the best in class in every category,” says Robertson. “A lot of people have touched this project, analyzed and said the business plan is achievable. Hyatt believed in the project.”

“Because the hotel was closed for six years, it gave us an opportunity that’s unprecedented in the industry,” he says. “We didn’t have to close. We could bring in new ideas and technologies. That’s difficult to do when you’re in a race to get it up and running.”

“We were able to reverse the entrance and transform from bricks and mortar to modern, glass,” he says. One entrance, though, isn’t enough during busy convention times. That’s why the hotel will operate with two entrances to process tremendous volumes of people.

Moving people is a priority to keep conventioneers happy. Premiering new elevator and escalator intelligence, the hotel can move large numbers of people quickly. “It’s a time and motion miracle,” says Robertson.

The room mix includes five over-sized suites tailored to the needs of meeting planners. Instead of pricey, stocked mini-bars, guests can stock their own refrigerators from a 24-hour convenience store/fresh market in the public area.

Robertson praises the quality of finishes throughout the property. “It’s not the refurbishing of a hotel, it’s a brand new structure accomplished on some existing bones.”

A metaphor for the city? In some ways, yes. It has kept the best of the old and overlaid the best of the new.

Convention Destination
“We’re in a great position. Our rooms are fresh,” the CVB’s Moon notes. “Other hotels are continuing to put money into their product. We had 800 restaurants before Katrina, we have 1,105 now. Our attractions and museums are operating at full steam. I feel like our package is really good.”

And that’s driving both convention and leisure travel. “Our leisure market is up,” she says. “It’s been steadily improving over the past few years. People are traveling more in general.”

“Convention business is good,” she says. “We’re ahead of pace going into 2012. In fact, we’re three times where we were going into 2011 when it comes to roomnights booked. Our pace is excellent going one, two, three years out. The number of attendees continues to grow.”

Of those surveyed for the 2010 New Orleans Visitor Profile, 22.3% said they were visiting for a convention, association, trade show, corporate meeting or general business. Nearly half — 47.9% — of those travelers extended their stay for pleasure for an average of 2.1 days.

The bulk of visitors, of course, 77.7%, were in New Orleans for vacation/pleasure. Those pleasure travelers spend an average of $569 per trip or about $142 per day.

Moon jokes that her crystal ball is a bit fuzzy, but because meeting planners book several years ahead, she sees continued growth. Still, she says, “Numbers aren’t as robust as they used to be in 2003, 2004. We’re not quite at pre-storm levels, because the market has changed dramatically. Clients have options, nationally, that they didn’t have six, seven years ago.”

Better than Before
The 1,622-room Hilton New Orleans Riverside, for example, spent $60 million rebuilding post-Katrina. With continued improvements, says Sawyers, those numbers are soaring closer to $100 million. “We tried to put the spin on it, that here is a product in better shape than ever before,” he says. “We made lemonade out of the lemons. Not only did we put things back, we rethought how they were. For example, our business center was always in the wrong place. We relocated it closer to meeting space.”

The changes are working for the city. Room rates are looking good, says Sawyers. “We [New Orleans] had the highest RevPAR increase in 2010 of any destination in the U.S.”

Sawyers knows what he’s talking about. He’s chair-elect of the New Orleans Convention and Visitors Bureau, treasurer of the Ernest N. Morial Convention Center, and past chairman of the Greater New Orleans Hotel & Lodging Association

Jeff Iavarone, vice president marketing/sales and ecommerce Expotel Hospitality Service, sees strengthening numbers as well. Expotel is owner/operator of seven branded and boutique hotels in the city. All were affected by the storm.

Leisure travel, he says, continues to grow as attendance rises for major events like Mardi Gras, Jazz Fest and French Quarter Fest.

“Our ADRs are back up to pre-Katrina levels,” he says. “In some cases our downtown hotels and the market are exceeding pre-Katrina ADRs. That’s due to a successful year because of conventions.”

March 2011 was the city’s most successful month in years. Occupancy peaked at 78.7%, average daily rate at $139.91 and RevPAR at $110.10, according to STR.

For those who are counting, growth isn’t straight upward, but one that trends upward. Monthly numbers fluctuate by season – lower in summer; and by festival schedules – highest during Mardi Gras. In fact, the CVB estimates that Mardi Gras generates as much as $1 billion in annual spending.

The future is shiny indeed with upcoming sporting events. “We’re going into a period of major sporting events that is not only going to be good for us from an economic impact, but for media exposure,” says Sawyers.

The city will host the NCAA Men’s Final Four in 2012 and the Women’s Final Four in 2013. They’ll have football’s 2012 BCS National Championship. And, in 2013, the city will host its 10th Super Bowl.

To accommodate anticipated growth in the city’s tourism, New Orleans Louis Armstrong International Airport is undergoing a $400-million improvement and modernization plan, scheduled for completion in September 2011.

The commitment to tourism – the city’s second-largest industry, second to activity at the port– reflects the regional economic contribution. The hospitality industry supports 70,000 workers, has an economic impact of $5 billion every year and funds about 30 percent of New Orleans’ annual operating budget through taxes, according to Early. And those numbers are growing.

“We’re on a roll,” says Sawyers. “I’m very optimistic about the resurgence of New Orleans regaining our place as one of the best destinations in the world. As a destination and a place to live I don’t think New Orleans has ever been better.”