By Brett T. Forshag
Vice President of Sales, HRI Lodging, Inc.
May 7, 2013

The New Orleans hotel market is a difficult mistress, simultaneously enticing and demanding, rewarding and infuriating hoteliers in the Crescent City.    Never is this more apparent (and occasionally painful) than when taking over a hotel in need of renovation and reflagging.

Visitors to New Orleans love the city’s architecture, its history, its unique atmosphere and idiosyncratic lifestyle.  As a result, visitors expect a certain amount of charm and quirkiness, if you will, from the city’s lodging offerings.  But when HRI Lodging and our partners at Interwest Capital acquired the Hotel New Orleans in 2011, the property was well past the threshold for forgivable foibles and was running well below its competitive set in terms of rate and occupancy.

Conventional wisdom would suggest that the hotel would benefit from its convention center location. However the city was still climbing out of its post-Katrina meetings slump and corporate travel was still operating under great recession cutbacks.

A Holiday Inn Select before losing its flag, the Hotel New Orleans was slated to transition into the city’s first Hyatt Place. To further complicate the situation, the hotel needed to remain open during the renovation, and low season summer was fast approaching.  If occupancy was well below par coming off of high season, how low might it go when the temperature topped 90 in the shade?

We never had to answer that question.

Like many hoteliers, I had been reluctant to rely on a third party to fill my hotels, but the unvarnished truth is that when there are no obvious demand drivers such as conventions or special events like Jazz Fest or Mardi Gras, it pays to have a partner with a broad reach.

By working closely with our Expedia market manager, we were able to take a low-performing hotel in the throes of renovation and sufficiently boost occupancy and ADR to keep it afloat during this critical period.

Expedia provided our hotel with enough leisure business to move occupancy up to the competitive set and increase ADR by several dollars.  That increase kept us afloat during the transition and enabled us to present a sensible picture to investors as we sought permanent financing for the project.

The Hyatt Place New Orleans/Convention Center opened in May of 2012 and now commands higher rate and occupancy than its competitors.  Weekends in New Orleans typically take care of themselves, but when there’s not a convention in town, our partners at Expedia keep the midweek guests coming.

Last year, our company also renovated and reflagged the Wyndham Chateau Bourbon to the Hyatt French Quarter.  As you might expect, the hotel’s location, coupled with the strength of the Hyatt brand, gave it a substantial lift in occupancy. However, to keep up the momentum and maintain a healthy ADR, we rely on Expedia to help with soft periods like the summer months.  Expedia’s promotions and broad reach help market our sultry city to visitors who’d prefer not to pay peak season prices.

In New Orleans, we are blessed with more than our share of high compression periods, and it would be tempting to reserve our entire inventory during those times, but we’ve found that even during peak demand periods, it makes sense to keep inventory available on Expedia.

Why?

1. For most leisure guests, an OTA is the first stop when planning a trip.  It’s just foolish to take your product off the shelves.
2. If the guest decides that the peak period is too much for their travel budget, they still might book for a less expensive time.
3. Being on an OTA during compression helps you yield rate.
4. Partnerships are 365-day alliances, while special events only come around once a year—or even less.

Our brands supply the lion’s share of our bookings, and coupled with special events, conventions and guest reviews, we can generate more than half of our business on our own.  For those “other” times, though, Expedia puts heads in my beds when no other channel is filling the hotel, and that’s a service I’m happy to recommend.
 
About the Author
Brett Forshag is Vice President of Sales for HRI Lodging, Inc. the hotel management arm of HRI Properties of New Orleans.  He has 24 years of combined hotel sales experience with Fairmont Hotels & Resorts, ITT Sheraton and Starwood Hotels & Resorts. He most recently served as Director of Sales for the 1,110 room Sheraton New Orleans Hotel.  Brett is the brand support for Hyatt, Hyatt Place, Hilton and Hilton Garden Inn hotels based on his vast industry knowledge and experience in creating award-winning sales cultures.

About HRI Lodging
HRI Lodging operates hotel properties in New Orleans, LA; Shreveport, LA; Jackson, MS and Richmond, VA. HRI Lodging hotels include the restored D.H. Holmes department store in New Orleans, which last year was renovated as the Hyatt French Quarter. Other historic properties include the restored King Edward Hotel in Jackson, MS and the Miller & Rhoads department store in Richmond, VA, both of which fly the Hilton Garden Inn flag. HRI Lodging’s other hotels are the Shreveport Hilton adjacent to the Convention Center in downtown Shreveport , the Hilton Garden Inn French Quarter/CBD and the Hyatt Place across the street from the New Orleans Convention Center.  For more information, go to www.hrilodging.com.
 
Based in New Orleans, HRI Properties (HRI) is a full-service real estate development company and a national leader in the adaptive reuse of historic structures. HRI’s mission is revitalizing cities by creating diverse, vibrant, sustainable communities. For more information, go to www.hriproperties.com.