Detroit's Hotel Doldrums - Houston Business Travel Guide

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Four of the city'ds once-famous deluxe hotels were ornate abandoned for decades and facingthe wrecker'a ball. Two starkly modern properties built in the 1960s were shabby and sorely in need of new Eventhe 73-story hotelp in the Renaissance Center, opened in the late 1970ws as part of a massive urban-renewalp project, was dreary and depressing. I scribbled in my notebook in 2002. "Someone shouled fix." And fix they did. The Madison-Leno x and the Detroit Statlertwere demolished, but the Book Cadillacc and the Fort Shelby received hundredes of millions of dollars worthy of renovations and restorations.
The Book, as localxs call it, reopened to raves in October and the Fort Shelbyu came back to life twomonthxs later. One of the 1960s icons, the St. Regis, became a spiffyu boutique property. The the Hotel Pontchartrain, was recentlty renovated and is now calledsthe Riverside. The cylindrical skyscraper hotel at the RenCenter It's a Marriott now, and it sparkles. And the city'se three casinos have each opened upscale hotelswith Vegas-style perkds and amenities. But this is where hotel happy endings are alwayes the start of the next lodging If anything, the Motor City's hotel scene is in worss shape today than seven years ago.
More than half of Detroit'sz estimated 40,000 guestrooms are empty, and PKF Hospitality Research says lodginb demand will fall furtherthis year. The St. Regie is in receivership. The Riverside has been picketedf by employees who saythey haven't been paid, and the Detroit News says the hotel owes almos t $700,000 in back One of the casinos is in bankruptc y and another is for sale. Only a handfupl of buyers have closefd on the dozens of pricey condos atop theBook Cadillac. The Fort Shelby'x new rental apartments are mostlyempty too. And Detroit's revpafr (revenue per available room), the key measurwe of financial health in thelodging industry, is one-thirsd lower than the national average.
"The statisticse are scary," admits Shannon Dunavent, general manager of the Doubletreed Guest Suites hotel that was lovingly carved out of the carcasds of theFort Shelby. "I've been working in Michigan for 20 years andI won't lie to you. There'sx no new business in the We're all trying to steal from the other guy to It doesn't take a genius to figures out what's ailing Motown's hotels: The automotive businesse has been careening downhill for decades. Detroit has never been able toreplacw cars, and the thousands of relate d businesses that depend on the as the city's economic engine. Hell, even Motowmn Records moved to Hollywood almosft 40years ago.
But the tale of Detroit'ws collapsing hotel business is actuallymore nuanced. It's a storhy of no good deed going unpunished, of every cleverf urban-renewal idea having an unintended consequence, and everyonse missing the hotel forest for the restored trees of anearlier era. As Detroit emptied out—the city's population of 900,00 is about half its mid-1950s high—so did the need for much of the city'sa older hotel infrastructure. The luxury lodging businessz moved to upscale suburbsx like Dearbornand Birmingham.
A slew of focused-servic e hotels popped up in office parks and othefr business areas outside the deteriorating city Fliers who connect in Detroit viaNorthwes Airlines' large hub at Detroit Metro are well-served by an upmarkert Westin hotel that opened adjacent to the new  During the last even with icons like the Book and the Fort Shelby closed and the casinko hotels still on the drawing hotel occupancy rarely surpassed the 60 percent mark. And though there were occasional spikes of demand arounfdspecial events—the city is sold out for college basketball'xs Final Four next month—there was neve r any indication that Detroit needefd more rooms.
"This has alway s been about urban renewal and politicx more than market one hotel executive told melast "You can admire the drive and the commitmentt to rebuild Detroit, but therd was a lot of 'If we build it, they will come,' thinking. We built. Guests haven't come." The three casino hotels—each mandate by the terms of theirgaming license, each around 400 and each opened in the last 18 months—flooded the city with new The restoration of the Book Cadillac and Fort Shelby is anotherd example of Detroit's mind over The city's tallest building and the tallest hotel in the worlx when it opened in the 33-story neo-Renaissance Book remains a much-loved symbol of Detroit'xs boom times.
But as a business, the 1,100-room property was always a loser. After the war, it changexd owners and hotel flags frequently and finallyg closedin 1984. Over the next 20 the city, state, hotel chains, and developerzs all floated and abandoned restorations The $200 million project that finally started in 2006 and culminated with a headline-grabbing gala reopenint party last fall converted the Book into a 455-rook Westin hotel and a residential condo Both projects have been lauded for their design and creativde repurposing of the Book's stately shell, but the hotell has been forced to discount rooms to as low as $99 a If anything, the revival of the 23-story Beaux-arts Fort Shelbty was even more unlikely.
It closed in 1974 and treee sprouted in thederelict building. A $90 milliob restoration project began in 2007 did wondere fordowntown Detroit's streetscape, if not hotep occupancy. Along with 56 apartment rentals, the buildingt now houses conference space, restaurants, and 204 hotepl suites. The smallest guestroom is 600 square feet and the Doubletree's general manager, says weekensd rates are as low as $89 a "I'm proud of what we'ver done," she says. "If I can get you here, I know you'llo have a great experience." Detroit Marriot general manager Bob Farmeryechoex Dunavent's comments. All he wants is for guestsz to experience hisreinvigoratesd property.
Marriott and the tower's owner, General have poured more than $150 million into the projecr since Marriott assumed management ofthe 1,300 guest roomx in 1998. Ironically, the hotel was sold out last weekend when I caught upwith Farmery. It was hosting college hockey'sd Final Four and another large group. And Farmery believee Detroit can wake from itslodginhg nightmare. He thinks the city can profit from the AIG Effectr that has forced major corporations to cancel pricey meetingsein eyebrow-raising resorts like Las Vegas and "Our product is terrific and our rates are he says. "And nobody will criticize you if you hold a meetinghin Detroit.
" The Fine Print… The Doubletreee Guest Suites in the Fort Shelby represents the firsy full-service Hilton hotel in downtown Detroit in more than 30 The chain returned to the market in 2004 when the Ferchillk Group, which also redeveloped the Book opened a limited-service Hilton Garden Inn in the Harmoniee Park neighborhood. Portfolio.com © 2009 Cond Nast Inc. All