Does New Orleans need more hotels? Tourism leaders think so
New Orleans has a lot of new hotels. More than a dozen are in the works or have opened in the past two years, from The Alder Hotel in Uptown to the Central Business District’s NOPSI Hotel.
Think the city has reached its limit? You’re probably not in the tourism industry.
Jeff Anding, vice president of external affairs for the New Orleans Convention and Visitors Bureau, said hotel availability remains a challenge as the agency works to grow convention and group meeting business. Anding spoke Tuesday afternoon (Oct. 10) at the Economic Real Estate Forecast Symposium at Loyola University, an annual event that parses trends affecting the local economy.
Anding noted the CVB used to work with about 40 hotels to piece together enough large blocks of rooms to accommodate convention and meeting attendees. That group has grown to roughly 70 hotels, and, still, availability can get tight when more than one large group is in town, he said.
Anding said the city could use another major downtown hotel, preferably close to the Ernest N. Morial Convention Center.
“We could use another 800-room hotel down there,” he said.
In all, the CVB estimates the city has added about 3,000 new hotel rooms in recent years, stretching from the Lower Garden District to the Faubourg Marigny. Half of those are located in the Central Business District.
The list of new CBD hotels includes the NOPSI Hotel, which opened on Baronne Street in July and The Troubadour on Gravier Street, which opened in December 2016.
Plans are in the works to convert several downtown buildings into hotels, including two Canal Street buildings — a former UNO building, set to open in 2018 as a dual-flagged hotel, and The Jung Hotel, where developers plan a mixed-use complex with a 145-room hotel. Construction to turn the former World Trade Center at the foot of Canal Street into a $360 million Four Seasons hotel and condo development is expected to finally kick off this fall after a two-year legal battle over the plans.
Anding said hotel room rates in New Orleans remain strong, especially when compared to larger group destinations such Las Vegas and Orlando.
He acknowledged short-term rental sites like Airbnb and HomeAway have changed how visitors are looking for and finding lodging, estimating the city’s more than 5,300 rentals pick up about 5 percent of business that would have otherwise gone to New Orleans hotels. Still, he said hotels appear to remain competitive in terms of pricing.
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Tourism officials say they’re gearing up for a healthy 2018, with early projections showing more than two-thirds of the city’s hotel space will be occupied throughout the year. Anding added hotel rooms in the city are expected to fetch an average daily rate of about $149.39 in 2018.
One potential problem? Anding said many of the hotels being renovated or built right now are leaning more toward attracting leisure travelers, ditching the large, expansive ballrooms and meeting spaces that convention planners are looking for in favor of trendy rooftop bars, lounge areas and restaurants.
Anding noted the leisure market is strong, but easily influenced by events beyond the city’s control, from high gasoline prices (not likely to happen anytime soon) to a terrorist attack. Conventions and meetings, on the other hand, are booked years in advance, and unlikely to change overnight, he said.
If leisure travel drops, it will weigh more heavily on a New Orleans market now full of new vacationer-friendly hotel spots, he said.
As for hopes for a new mega-hotel by the convention center, plans for a development named “The Trade District” that would bring retail, restaurants, a riverfront park, and a 1,200-room hotel to the property at the Uptown end of the building still appear to be a long-shot. Anding noted Morial Convention Center last year put out a request for information from potential developers and builders on the project, but the plan will likely remain on hold as the facility seeks a replacement for General Manager Bob Johnson, who retired in September.
“It’s been mothballed for the moment,” Anding said.