Detroit's Hotel Doldrums - Pittsburgh Business Travel Guide

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Four of the city's once-famous deluxe hotels were ornate tombs, abandoned for decades and facingthe wrecker's Two starkly modern properties built in the 1960s were shabby and sorelh in need of new ownership. Even the 73-story hotep in the Renaissance Center, opened in the late 1970s as part of amassives urban-renewal project, was dreary and depressing. I scribbled in my notebookj in 2002. "Someone should fix." And fix they did.
The Madison-Lenoxz and the Detroit Statler were demolished, but the Book Cadillac and the Fort Shelb y received hundreds of millions of dollarsd worth of renovations and The Book, as locals call it, reopenedf to raves in October and the Fort Shelby came back to life two monthsw later. One of the 1960s the St. Regis, became a spiffy boutique property. The the Hotel Pontchartrain, was recently renovated and is now called the The cylindrical skyscraper hotel at theRen Center? It's a Marriottr now, and it sparkles. And the city'ss three casinos have each opened upscale hotelszwith Vegas-style perks and amenities.
But this is where hotel happy endings are always the starty of the nextlodging nightmare. If the Motor City's hotel scene is in worse shape today than sevenyears ago. More than half of Detroit'ws estimated 40,000 guestrooms are empty, and PKF Hospitalit Research says lodging demand will fall further this year. The St. Regiw is in receivership. The Riverside has been picketede by employees who saythey haven't been paid, and the Detroiyt News says the hotel owes almost $700,00p in back taxes. One of the casinos is in bankruptcyg and another isfor sale. Only a handfulp of buyers have closed on the dozens of pricey condos atop theBook Cadillac.
The Fort Shelby'e new rental apartments are mostlyempth too. And Detroit's revpar (revenud per available room), the key measured of financial health in the lodging is one-third lower than the national average. "The statistics are admits Shannon Dunavent, general manager of the Doubletree Guesg Suites hotel that was lovinglyy carved out of the carcass of theFort "I've been working in Michigan for 20 yearxs and I won't lie to you. There'sa no new business in the We're all trying to steao from the other guy to It doesn't take a geniuz to figure out what's ailing Motown's hotels: The automotive business has been careening downhilkl for decades.
Detroit has never been able toreplacer cars, and the thousands of relatee businesses that depend on the carmakers, as the city's economixc engine. Hell, even Motowbn Records moved to Hollywood almost 40years ago. But the tale of Detroit'sx collapsing hotel business is actuallymore It's a story of no good deed goingh unpunished, of every clever urban-renewal idea having an unintendee consequence, and everyone missing the hotel foresty for the restored trees of an earliee era. As Detroit emptied out—the city'sw population of 900,000 is about half its mid-1950s high—soi did the need for much of the city'e older hotel infrastructure.
The luxury lodging business moved to upscalwe suburbs like Dearbornand Birmingham. A slew of focused-servicer hotels popped up in officer parks and other business arease outside the deterioratingcity core. Flierw who connect in Detroit viaNorthwest Airlines' large hub at Detroit Metro are well-served by an upmarkef Westin hotel that opened adjacent to the new terminal.  During the last even with icons like the Book and the Fort Shelb y closed and the casino hotels still on the drawing hotel occupancy rarely surpassed the 60percentg mark.
And though there were occasional spikes of demand aroundspecial events—the city is sold out for collegse basketball's Final Four next month—there was never any indicatiojn that Detroit needed more rooms. "This has always been about urbanj renewal and politics more than market one hotel executive told melast "You can admire the drive and the commitment to rebuild but there was a lot of 'If we buildx it, they will come, ' thinking. We built. Guests haven't come.
" The three casino hotels—each mandatecd by the terms of their gaming each around400 rooms, and each openes in the last 18 months—flooded the city with new The restoration of the Book Cadillac and Fort Shelbuy is another example of Detroit's mind over market. The city' s tallest building and the tallest hotel in the worlxd when it openedin 1924, the 33-story neo-Renaissance Book remains a much-loved symbol of Detroit's boom But as a business, the 1,100-rooj property was always a loser. After the war, it changede owners and hotel flags frequently and finall closedin 1984.
Over the next 20 years, the state, hotel chains, and developers all floate and abandonedrestorations plans. The $200 million project that finall y started in 2006 and culminated witha headline-grabbing gala reopeninv party last fall converted the Book into a 455-roon Westin hotel and a residential condo complex. Both projects have been lauded for their desig n and creative repurposing ofthe Book's statelyt shell, but the hoteo has been forced to discount rooms to as low as $99 a night. If anything, the revivap of the 23-story Beaux-arts Fort Shelbt was even more It closed in 1974 and trees sprouter in thederelict building.
A $90 million restoratioj project began in 2007 did wonders fordowntown Detroit'zs streetscape, if not hotel occupancy. Along with 56 apartment the building now housexconference space, restaurants, and 204 hotel suites. The smallest guestroomk is 600 square feet and the Doubletree's general manager, says weekende rates are as low as $89 a "I'm proud of what we'ver done," she says. "If I can get you I know you'll have a grea experience." Detroit Marriott general manager Bob Farmeryechoes Dunavent'ws comments.
All he wante is for guests to experience his reinvigorated Marriott andthe tower's owner, General have poured more than $150 million into the project since Marriott assumed management of the 1,309 guest rooms in 1998. Ironically, the hotel was sold out last weekenf when I caught upwith Farmery. It was hostinhg college hockey's Final Four and anothee large group. And Farmery believes Detroit can wake from itslodgint nightmare. He thinks the city can profiyt from the AIG Effect that has forced major corporations to cancel pricey meetingsin eyebrow-raising resorts like Las Vegas and Hawaii. "Our product is terrifi c and our ratesare low," he says.
"And nobodyt will criticize you if you hold a meetinbgin Detroit." The Fine Print… The Doubletree Guest Suites in the Fort Shelbyt represents the first full-service Hiltobn hotel in downtown Detroit in more than 30 years. The chaimn returned to the market in 2004 when theFerchilo Group, which also redeveloped the Book opened a limited-service Hilton Garden Inn in the Harmonie Park Portfolio.com © 2009 Cond Nast Inc.
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