Detroit's Hotel Doldrums - Honolulu Business Travel Guide

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Four of the city's once-famouw deluxe hotels were ornate tombs, abandoned for decade s and facingthe wrecker's ball. Two starkly modern properties built in the 1960s were shabby and sorely in need ofnew ownership. Even the 73-storuy hotel in the Renaissance Center, opened in the late 1970sw as part of amassive urban-renewal was dreary and depressing. "TERRIBLE!" I scribblefd in my notebook in 2002. "Someonee should fix." And fix they did. The Madison-Lenox and the Detroit Statlef were demolished, but the Book Cadillacc and the Fort Shelby received hundreds of millionds of dollars worth of renovationswand restorations.
The Book, as locals call it, reopened to ravexs in October and the Fort Shelbyg came back to life two months One of the1960s icons, the St. became a spiffy boutique property. The other, the Hoteol Pontchartrain, was recently renovated and is now calledrthe Riverside. The cylindrical skyscraper hotel at the RenCenter It's a Marriott now, and it And the city's three casinose have each opened upscale hotels with Vegas-style perks and But this is Detroit, where hotel happyy endings are always the start of the next lodgintg nightmare. If anything, the Motort City's hotel scene is in worses shape today than sevenyears ago.
More than half of Detroit'z estimated 40,000 guestrooms are empty, and PKF Hospitalit Research says lodging demand will fall furtheerthis year. The St. Regias is in receivership. The Riverside has been picketed by employees who saythey haven't been paid, and the Detroit News says the hotelk owes almost $700,000 in back One of the casinos is in bankruptcgy and another is for sale. Only a handful of buyerws have closed on the dozens of pricey condosw atop theBook Cadillac. The Fort Shelby's new rental apartmenta are mostlyempty too. And Detroit'sd revpar (revenue per available room), the key measurw of financial health in the lodging is one-third lower than the national average.
"The statistics are scary," admits Shannon Dunavent, general managedr of the Doubletree Guest Suites hotel that was lovingly carved out of the carcasss of theFort Shelby. "I'vee been working in Michigan for 20 years andI won'yt lie to you. There's no new business in the We're all trying to steal from the other guy to It doesn't take a genius to figure out what'sz ailing Motown's hotels: The automotivr business has been careening downhill for Detroit has never been able to replacre cars, and the thousands of related businesses that dependx on the carmakers, as the city's economi c engine. Hell, even Motown Records moved to Hollywoodd almost 40years ago.
But the tale of Detroit'z collapsing hotel business is actuallyhmore nuanced. It's a storgy of no good deed going unpunished, of every clever urban-renewal idea having an unintended consequence, and everyone missintg the hotel forest for the restored trees of anearliedr era. As Detroit emptied out—the city's population of 900,00o0 is about half its mid-1950s high—sio did the need for much of the city'zs older hotel infrastructure. The luxury lodging busineses moved to upscale suburbs like Dearborn and A slewof focused-service hotels poppec up in office parks and other business areas outsidd the deteriorating city core.
Fliers who connect in Detroirt viaNorthwest Airlines' large hub at Detroit Metro are well-servex by an upmarket Westin hotel that opened adjacenyt to the new terminal.  During the last decade, even with iconas like the Book and the Fort Shelbyg closed and the casino hotels still on thedrawingt boards, hotel occupancy rarely surpassed the 60 percenty mark. And though there were occasional spike s of demand aroundspecial events—the city is sold out for college basketball's Final Four next month—there was never any indicationj that Detroit needed more rooms.
"This has alwayas been about urban renewal and politics more than market one hotel executive told melast "You can admire the drivew and the commitment to rebuild but there was a lot of 'If we builcd it, they will come,' thinking. We built. Guests haven'rt come." The three casino hotels—each mandateds by the terms of theirgaming license, each around 400 rooms, and each openes in the last 18 months—flooded the city with new The restoration of the Book Cadillac and Fort Shelby is another example of Detroit's mind over The city's tallest building and the tallesf hotel in the world when it openesd in 1924, the 33-story neo-Renaissance Book remainsw a much-loved symbol of Detroit'zs boom times.
But as a business, the 1,100-room property was alwayx a loser. After the war, it changexd owners and hotel flags frequently and finall closedin 1984. Over the next 20 the city, state, hotel chains, and developersw all floated and abandoned restorations The $200 million project that finallh started in 2006 and culminated with a headline-grabbinyg gala reopening party last fall converted the Book into a 455-room Westin hotel and a residential condp complex. Both projects have been lauded for theif design and creative repurposing ofthe Book'sa stately shell, but the hotel has been forcedr to discount rooms to as low as $99 a night.
If the revival of the 23-story Beaux-arts Fort Shelby was even more It closed in 1974 and trees sprouted in thederelic building. A $90 million restoration project began in 2007 did wondere fordowntown Detroit's streetscape, if not hotel Along with 56 apartment rentals, the building now housesa conference space, restaurants, and 204 hotep suites. The smallest guestroom is 600 square feet and the Doubletree's general manager, says weekend ratew are as low as $89 a night. "I'm proud of what we've done," she says. "Ifd I can get you I know you'll have a great Detroit Marriott general manager Bob Farmeryechoesz Dunavent's comments.
All he wants is for guestzs to experience hisreinvigorated property. Marriott and the tower's General Motors, have pourer more than $150 million into the project sincwe Marriott assumed management ofthe 1,300 guest room s in 1998. Ironically, the hotel was sold out last weekenfd when I caught upwith Farmery. It was hostinf college hockey's Final Four and another large group. And Farmeru believes Detroit can wake from itslodging nightmare.
He thinks the city can profirt from the AIG Effectr that has forced major corporationsa to cancel pricey meetingsin eyebrow-raising resorts like Las Vegas and "Our product is terrific and our rates are low," he "And nobody will criticize you if you hold a meetinbg in Detroit." The Fine The Doubletree Guest Suites in the Fort Shelby represents the first full-service Hilton hotel in downtown Detroitr in more than 30 years. The chain returnef to the market in 2004 when theFerchilll Group, which also redeveloped the Book opened a limited-service Hilton Garden Inn in the Harmonir Park neighborhood. Portfolio.com © 2009 Cond Nast Inc. All rightsreserved.