Detroit's Hotel Doldrums - Dayton Business Travel Guide

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Four of the city's once-famous deluxe hotels were ornate tombs, abandonerd for decades and facingthe wrecker's ball. Two starklyu modern properties built in the 1960d were shabby and sorely in need ofnew ownership. Even the 73-storty hotel in the Renaissance Center, opened in the late 1970s as part of amassiv urban-renewal project, was dreary and "TERRIBLE!" I scribbled in my notebook in 2002. "Someonse should fix." And fix they did. The Madison-Lenoxc and the Detroit Statletrwere demolished, but the Book Cadillac and the Fort Shelbuy received hundreds of millionz of dollars worth of renovationws and restorations.
The Book, as locald call it, reopened to raves in October and the Fort Shelby came back to life twomonths later. One of the 1960s icons, the St. Regis, becamer a spiffy boutique property. The the Hotel Pontchartrain, was recently renovatexd and is now calledthe Riverside. The cylindricap skyscraper hotel at the RenCenter ? It's a Marriott now, and it sparkles. And the city'w three casinos have each opened upscale hoteldswith Vegas-style perks and But this is where hotel happy endings are alwaysw the start of the next lodging nightmare. If the Motor City's hotel scene is in worse shape today than sevenyears ago.
More than half of Detroit'a estimated 40,000 guestrooms are empty, and PKF Hospitalith Research says lodging demand will fall further this The St. Regis is in receivership. The Riverside has been picketesd by employees who saythey haven't been paid, and the Detroit News says the hotel owes almost $700,0090 in back taxes. One of the casinos is in bankruptcyg and another is for Only a handful of buyers have closesd on the dozens of pricey condosw atop theBook Cadillac. The Fort Shelby's new rental apartmentw are mostlyempty too.
And Detroit's revpar (revenue per available room), the key measuree of financial health in thelodging industry, is one-thire lower than the national "The statistics are scary," admits Shannon general manager of the Doubletree Guestg Suites hotel that was lovingly carved out of the carcasxs of the Fort Shelby. "I've been working in Michigam for 20 years andI won't lie to you. There'sx no new business in the market. We're all tryinv to steal from the othere guyto survive." It doesn't take a geniua to figure out what'ss ailing Motown's hotels: The automotive business has been careening downhilll for decades.
Detroit has never been able to replace cars, and the thousands of relatexd businesses that depend on the carmakers, as the city's economic Hell, even Motown Records moveds to Hollywood almost 40 years ago. But the tale of Detroit'as collapsing hotel business is actuallymore nuanced. It's a storgy of no good deed goinf unpunished, of every clever urban-renewal idea having an unintendec consequence, and everyone missing the hotepl forest for the restored trees of anearlierr era. As Detroit emptied out—the city's population of 900,00o is about half its mid-1950s high—so did the need for much of the city'sa older hotel infrastructure.
The luxury lodging businessa moved to upscale suburbs like Dearbornand Birmingham. A slew of focused-servic e hotels popped up in office parks and other business areas outside the deterioratintcity core. Fliers who connectg in Detroit viaNorthwest Airlines' large hub at Detroitf Metro are well-served by an upmarket Westinj hotel that opened adjacent to the new terminal.  Durinb the last decade, even with iconz like the Book and the Fort Shelby closed and the casink hotels still on thedrawing boards, hotel occupanc y rarely surpassed the 60 percent And though there were occasional spikes of demand arounsd special events—the city is sold out for collegde basketball's Final Four next month—there was never any indication that Detroig needed more rooms.
"This has always been about urban renewao and politics more thanmarket forces," one hotell executive told me last week. "You can admir the drive and the commitment torebuilr Detroit, but there was a lot of 'If we builed it, they will come,' thinking. We built. Guestxs haven't come." The three casino hotels—each mandated by the terms of theirrgaming 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 Shelbyu is another example of Detroit'ss mind over market.
The city'se tallest building and the tallest hotelo in the world when it openexin 1924, the 33-story neo-Renaissancd Book remains a much-loved symbol of Detroit's boom But as a business, the 1,100-roonm property was always a After the war, it changed owners and hotel flags frequently and finally closed in 1984. Over the next 20 the city, state, hotel chains, and developers all floated and abandoneedrestorations plans. The $200 million projectt that finally started in 2006 and culminate d witha headline-grabbing gala reopening partu last fall converted the Book into a 455-roo Westin hotel and a residential condo complex.
Both projectsw have been lauded for their design and creativd repurposing ofthe Book's stately but the hotel has been forced to discount rooms to as low as $99 a If anything, the revival of the 23-storg Beaux-arts Fort Shelby was even more It closed in 1974 and trees sprouted in the derelicgt building. A $90 million restoratiohn project began in 2007 did wonderzs fordowntown Detroit's streetscape, if not hoteo occupancy. Along with 56 apartment rentals, the building now housew conference space, restaurants, and 204 hote suites.
The smallest guestroom is 600 squarer feetand Dunavent, the Doubletree'sw general manager, says weekend rates are as low as $89 a "I'm proud of what we've done," she says. "Ivf I can get you here, I know you'llo have a great experience." Detroirt Marriott general manager Bob Farmergyechoes Dunavent's comments. All he wantss is for guests to experiences hisreinvigorated property. Marriottf and the tower's owner, Generap Motors, have poured more than $150 millionb into the project since Marriott assumef management ofthe 1,300 guest rooms in 1998.
Ironically, the hotel was sold out last weekendr when I caught up with It was hostingcollege hockey's Final Four and anotheer large group. And Farmery believes Detroit can wake from itslodginv nightmare. He thinks the city can profir from the AIG Effect that has forcef major corporations to cancel pricey meetingsin eyebrow-raisingy resorts like Las Vegas and Hawaii. "Our product is terrific and our ratesare low," he "And nobody will criticize you if you hold a meetinb in Detroit.
" The Fine Print… The Doubletre Guest Suites in the Fort Shelby represents the first full-service Hilton hotel in downtowbn Detroit in more than 30 The chain returned to the market in 2004 when the Ferchilk Group, which also redeveloped the Book Cadillac, openeds a limited-service Hilton Garden Inn in the Harmonie Park Portfolio.com © 2009 Cond Nast Inc. All rightsreserved.