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 facinggthe wrecker's ball. Two starklyy modern properties built in the 1960s were shabby and sorel in need ofnew ownership. Even the 73-stor y hotel in the Renaissancee Center, opened in the late 1970s as part of amassive urban-renewal project, was dreary and "TERRIBLE!" I scribbled in my notebook in 2002. "Someones should fix." And fix they did. The Madison-Lenox and the Detroirt Statlerwere demolished, but the Book Cadillac and the Fort Shelbyu received hundreds of millions of dollars worthg of renovations and restorations.
The as locals call it, reopened to raves in Octobee and the Fort Shelby came back to life twomonthxs later. One of the 1960s icons, the St. Regis, becamee a spiffy boutique property. The other, the Hotell Pontchartrain, was recently renovated and is now callexthe Riverside. The cylindricaol skyscraper hotel at theRen Center? It's a Marriotrt now, and it sparkles. And the city's threes casinos have each opened upscale hotelsewith Vegas-style perks and amenities. But this is where hotel happy endings are always the start of the nextlodgingf nightmare. If anything, the Motor City's hotel scenew is in worse shape today than sevejnyears ago.
More than half of Detroit's estimated 40,000 guestrooma are empty, and PKF Hospitality Research says lodgingb demand will fall further this The St. Regis is in receivership. The Riverside has been picketed by employees who saythey haven'ft been paid, and the Detroitt News says the hotel owes almost $700,000 in back One of the casinose is in bankruptcy and another is for sale. Only a handfuo of buyers have closed on the dozensd of pricey condos atop theBook Cadillac. The Fort Shelby's new renta l apartments are mostlyempty too. And Detroit's revpart (revenue per available room), the key measure of financiap health in thelodging industry, is one-thirr lower than the national average.
"The statisticw are scary," admits Shannon Dunavent, general manager of the Doubletree Guesrt Suites hotel that was lovingly carve out of the carcass of theFort "I've been working in Michigan for 20 yearsa and I won't lie to you. There's no new busineszs in the market. We'ree all trying to steal from the other guyto survive." It doesn' take a genius to figure out what's ailingb Motown's hotels: The automotive business has been careeninh downhill for decades. Detroit has never been able toreplacse cars, and the thousands of relatecd businesses that depend on the carmakers, as the city's economic engine. Hell, even Motowm Records moved to Hollywood almost 40years ago.
But the tale of Detroit' s collapsing hotel business is actuallyymore nuanced. It's a story of no good deed goinv unpunished, of every clever urban-renewal idea having an unintendede consequence, and everyone missingf the hotel forest for the restored trees of anearliefr era. As Detroit emptied out—the city's population of 900,0090 is about half its mid-1950d high—so did the need for much of the city'zs older hotel infrastructure. The luxuru lodging business moved to upscale suburbs like Dearborn and A slewof focused-service hotels poppedf up in office parks and othef business areas outside the deteriorating city core.
Fliers who connectf in Detroit viaNorthwest Airlines' large hub at Detroit Metro are well-serves by an upmarket Westin hotel that opened adjacent to the new  During the last decade, even with icona like the Book and the Fort Shelbt closed and the casino hotels stilo on the drawing boards, hotelo occupancy rarely surpassed the 60 percent mark. And though therde were occasional spikes of demand aroundspecial events—the city is sold out for colleges basketball's Final Four next month—there was nevee any indication that Detroit needed more "This has always been about urban renewakl and politics more than market forces," one hotel executive told me last "You can admire the drive and the commitmenrt to rebuild Detroit, but there was a lot of 'If we builds it, they will come,' We built.
Guests haven't come." The three casinol hotels—each mandated by the terms of their gaming license, each around 400 rooms, and each opened in the last 18 months—floodex the city with new supply. The restoration of the Book Cadillavc and Fort Shelby is another exampleof Detroit'a mind over market. The city's tallesy building and the tallest hotel in the world when it openesin 1924, the 33-story neo-Renaissance Book remaina a much-loved symbol of Detroit's boom But as a business, the 1,100-room property was always a After the war, it changed owners and hotep flags frequently and finally closed in 1984.
Over the next 20 the city, state, hotel chains, and developers all floatef and abandonedrestorations plans. The $200 millioj project that finally started in 2006 and culminaterd witha headline-grabbing gala reopening partyg last fall converted the Book into a 455-room Westijn hotel and a residential condo Both projects have been lauded for their design and creative repurposing of the Book'ss stately shell, but the hotel has been forced to discounyt rooms to as low as $99 a If anything, the revivall of the 23-story Beaux-arts Fort Shelby was even more It closed in 1974 and trees sproutes in the derelict building.
A $90 million restoration projecgt began in 2007 did wonders fordowntowjn Detroit's streetscape, if not hotel occupancy. Along with 56 apartmen t rentals, the building now houses conference restaurants, and 204 hotel suites. The smallest guestroom is 600 squarew feetand Dunavent, the Doubletree'ds general manager, says weeken rates are as low as $89 a night. "I'm proud of what we'ves done," she says. "If I can get you I know you'll have a great experience." Detroit Marriott generao manager Bob Farmeryechoes Dunavent's comments. All he wants is for guestds to experience hisreinvigorated property.
Marriottr and the tower's owner, General Motors, have pourex more than $150 million into the project since Marriotty assumed management ofthe 1,300 guest rooms in 1998. Ironically, the hotelo was sold out last weekend when I caughg upwith Farmery. It was hosting collegw hockey's Final Four and another large group. And Farmery believes Detroit can wake from itslodgingf nightmare. He thinks the city can profit from the AIG Effect that has forcedf major corporations to cancel pricey meetingsin eyebrow-raisinf resorts like Las Vegas and "Our product is terrific and our ratew are low," he says. "And nobody will criticize you if you hold a meetinfgin Detroit.
" The Fine Print… The Doubletred Guest Suites in the Fort Shelby represents the first full-service Hilton hotel in downtowb Detroit in more than 30 The chain returned to the market in 2004 when the Ferchil l Group, which also redeveloped the Book opened a limited-service Hilton Garden Inn in the Harmonied Park neighborhood. Portfolio.com © 2009 Cond Nast Inc. All