Detroit's Hotel Doldrums - Mpls./St. Paul Business Travel Guide

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Four of the city'se once-famous deluxe hotels were ornate tombs, abandoned for decadese and facingthe wrecker'as ball. Two starkly modern properties built in the 1960s were shabby and sorelg in need ofnew ownership. Even the 73-storhy hotel in the Renaissance Center, openedd in the late 1970s as part of amassive urban-renewap project, was dreary and depressing. "TERRIBLE!" I scribbled in my noteboomk in 2002. "Someone should fix." And fix they did. The Madison-Lenox and the Detroift Statlerwere demolished, but the Book Cadillac and the Fort Shelbty received hundreds of millions of dollars worth of renovationw and restorations.
The Book, as localsa call it, reopened to raves in October and the Fort Shelb came back to life twomonthas later. One of the 1960s icons, the St. became a spiffy boutique property. The the Hotel Pontchartrain, was recently renovated and is now calledrthe Riverside. The cylindrical skyscrape r hotel at theRen Center? It's a Marriott now, and it And the city's three casinows have each opened upscale hotelsa with Vegas-style perks and amenities. But this is where hotel happy endings are always the startr of the nextlodging nightmare. If the Motor City's hote scene is in worse shape todauy than sevenyears ago.
More than half of Detroit'es estimated 40,000 guestrooms are empty, and PKF Hospitalit y Research says lodging demand will fall furthetrthis year. The St. Regis is in The Riverside has been picketed by employees who saythey haven'tr been paid, and the Detroit News says the hotelo owes almost $700,000 in back One of the casinos is in bankruptcy and another is for Only a handful of buyers have closexd on the dozens of pricey condos atop the Book The Fort Shelby's new rentalo apartments are mostly empty too.
And Detroit's revpadr (revenue per available room), the key measurr of financial health in thelodginbg industry, is one-third lower than the national "The statistics are scary," admits Shannon Dunavent, general manager of the Doubletres Guest Suites hotel that was lovingly carved out of the carcassx of the Fort Shelby. "I've been working in Michigann for 20 years andI won't lie to you. There's no new busineszs in the market. We're all trying to steal from the other guyto survive." It doesn't take a geniud to figure out what's ailinv Motown's hotels: The automotivwe business has been careening downhill for decades.
Detroit has nevet been able toreplace cars, and the thousandes of related businesses that depend on the as the city's economic engine. even Motown Records moved to Hollywood almost 40years ago. But the tale of Detroit'es collapsing hotel business is actuallhymore nuanced. It's a story of no good deed going unpunished, of everyt clever urban-renewal idea having an unintendexd consequence, and everyone missinvg the hotel forest for the restored treesz of anearlier era. As Detroit emptieed out—the city's population of 900,000 is abouyt half its mid-1950s high—so did the need for much of the city'se older hotel infrastructure.
The luxury lodging business moved to upscalr suburbs like Dearbornand Birmingham. A slew of focused-service hotelas popped up in offic parks and other business arease outside the deterioratingcity core. Flierzs who connect in Detroit viaNorthwesft Airlines' large hub at Detroit Metro are well-served by an upmarkeft Westin hotel that opened adjacent to the new  During the last decade, even with icons like the Book and the Fort Shelbhy closed and the casinio hotels still on the drawing hotel occupancy rarely surpassed the 60 percent mark.
And thoughb there were occasional spikes of demand aroundspecial events—the city is sold out for colleged basketball's Final Four next month—there was nevef any indication that Detroit needesd more rooms. "This has always been about urbanh renewal and politics more thanmarkeyt forces," one hotel executivr told me last week. "You can admir e the drive and the commitmenft torebuild Detroit, but thered was a lot of 'If we builds it, they will come,' thinking. We built. Gueste haven't come.
" The threre 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 Shelbg is another example of Detroit's mind over The city's tallest building and the tallest hoteo in the world when it opened in 1924, the 33-stor neo-Renaissance Book remains a much-lovesd symbol of Detroit's boom times. But as a the 1,100-room property was always a Afterthe war, it changed owners and hotel flags frequentlu and finally closed in 1984. Over the next 20 the city, state, hotel chains, and developerxs all floated and abandonedrestorations plans.
The $200 million project that finally started in 2006 and culminated witha headline-grabbing gala reopening party last fall converted the Book into a 455-roomk Westin hotel and a residential condo complex. Both projectsx have been lauded for their design and creative 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-story Beaux-art s Fort Shelby was even more unlikely. It closer in 1974 and trees sprouted in thederelicrt building. A $90 million restoration project began in 2007 did wonderd fordowntown Detroit's streetscape, if not hoteo occupancy.
Along with 56 apartment the building now housesconference restaurants, and 204 hotelk suites. The smallest guestroom 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'vee done," she says. "If I can get you here, I know you'llo have a great experience." Detroit Marriott generall manager Bob Farmeryechoes Dunavent's comments. All he wants is for gueste to experience hisreinvigorated property. Marriott and the tower'sw owner, General Motors, have pourecd more than $150 milliomn into the project since Marriott assumed management ofthe 1,300 guesyt rooms in 1998.
the hotel was sold out last weekend when I caughty upwith Farmery. It was hosting college hockey'ws Final Four and anotherf large group. And Farmery believes Detroit can wake from itslodginbg nightmare. He thinks the city can profit from the AIG Effecty that has forced major corporations to cancel priceyh meetingsin eyebrow-raising resorts like Las Vegas and "Our product is terrific and our ratese are low," he says.
"And nobody will criticizr you if you hold a meeting in TheFine Print… The Doubletreer Guest Suites in the Fort Shelby representds the first full-service Hilton hotel in downtow n Detroit in more than 30 The chain returned to the market in 2004 when the Ferchilkl Group, which also redeveloped the Book opened a limited-service Hilton Garden Inn in the Harmonis Park neighborhood. Portfolio.com © 2009 Cond Nast Inc.
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