New Orleans' tourism industry took a one-two punch from the storms passing over the city combined with event cancellations following an increase in COVID-19 cases. While hoteliers are hopeful for a return in business, October and beyond is still up in the air.
In early August, a surge in COVID-19 cases in Louisiana led organizers to cancel the New Orleans Jazz & Heritage Festival that would have taken place in October. On Aug. 29, Hurricane Ida made landfall in Louisiana, with reports noting it is the "fifth strongest hurricane [based on wind speed] ever to make landfall in the continental U.S." Two weeks later, Tropical Depression Nicholas swept across Houston to Louisiana.
“One of the most distressing parts of this is the heaviest rain now is expected to fall in areas that were most devastated by Hurricane Ida, down in southeast Louisiana,” Louisiana Gov. John Bel Edwards said at a news conference on Tuesday afternoon, the New York Times writes. “Take the threats from Nicholas very seriously.”
As for Louisiana hotels, the damage was a mixed bag, depending on location. New Orleans generally fared well while the suburbs and smaller communities experienced much more significant damage.
Hurricane Ida Impact
Kenny Jacques, general manager of the Troubadour Hotel New Orleans, Tapestry Collection by Hilton, said in an email interview the damage Ida did to the power grid and infrastructure seemed to be the most significant.
"There has also been widespread roof damage in residential areas throughout the city, which has further tightened an already unfavorable housing market," he said. "This has made it difficult for some residents to return, with many apartments or homes requiring repairs."
Hurricane Ida, however, does not compare to Hurricane Katrina 16 years ago, he said.
"In evacuating the city a few days after Katrina and returning a few weeks later, the visible devastation from water damage was enormous," he said. "This same visible damage can still be seen in some areas today."
The levee project completed by the U.S. Army Corps of Engineers served its purpose, and history did not repeat itself, he said.
"Outside of some street lights being out, the city already looks like it did on Aug. 28, prior to the storm," he said.
Kerry Ranson, CEO of Hoover, Alabama-based third-party management company HP Hotels, said downtown New Orleans for the most part "has come through really well." His downtown properties, such as the Hotel Indigo New Orleans — French Quarter, mostly sustained small wind damage on the roof and accumulated water and debris.
"We've done fine. We've been operational throughout, even for the first few days after the storm," he said.
Sheenal Patel, CEO of Chicago-based hotel management and investment company Arbor Lodging Management, said it's been a tough couple of weeks for the Holiday Inn Express & Suites New Orleans Airport South.
"The hurricane came in fairly quickly," he said, adding most staff evacuated, and only now are some starting to return. "Some of the biggest problems have been there was ... about a week and a half where there was no electricity. That caused a lot of other issues."
At the time, more than 30 construction workers arrived at the hotel, but it was not accepting other guests for about two weeks. The Holiday Inn Express & Suites New Orleans Airport South is now taking reservations from other guests.
"We will get the hotel back up to par in fairly short order," he said. "There will be some longer-term construction that will take some time for us to get supplies and materials, but we're lucky we have a few construction crews basically a call away."
Mark Wilson, general manager of the Bourbon Orleans Hotel in the French Quarter, said his property was lucky, only being out of power for two days and having an emergency generator kick on. The hotel had about 20 staff members and 40 guests inside when the storm hit, and employees were able to care for each guest, providing complimentary breakfast.
"Once we got power back we were good to go ... we rolled right into accepting relief workers. Right now, I'm running over the next two weeks about 85% occupancy," he said, "The only thing that's been a little slow to reopen has been our bar on Bourbon Street, because the traffic on Bourbon changed so much. I do have it open on weekends."
The Bourbon New Orleans is now open for leisure travel, and it had 30 arrivals on Sept. 16, he said.
The Troubadour Hotel New Orleans, Tapestry Collection by Hilton, purposely built its rooftop bar to withstand Category 4 storms, and last year was the first year it was put to the test.
Jacques said this provided his team with peace of mind.
"In hurricane conditions, having gone through a Category 1 with Zeta last year and a Category 4 or 5 with Ida this year, it's an incredible feeling of confidence that it provides in knowing what it can stand up to," he said, adding during Ida the rooftop bar was left with only a few scratches. "Much like our levees, we now know that our rooftop is here to stay."
Jacques added that more than 26,000 lineworkers came to the city to restore power to greater New Orleans. His hotel also housed first responders.
"While we had many cancellations due to the storm and the aftermath, this influx of catastrophe workers and volunteers has us, and many other hotels in the area, sold well out into October," he said.
Bookings Disappeared in September
With the cancellation of leisure events this fall including the Jazz Festival and French Quarter Festival, Wilson said it immediately affected future bookings.
"When those were canceled, of course all the reservations on the books were canceled. We're talking hundreds and hundreds of thousands of dollars," he said. "It was a very big negative for our industry."
He said the city's mandate that requires patrons who are entering indoor facilities to be fully vaccinated or provide a negative COVID-19 test also had an effect on group bookings.
The Bourbon New Orleans was in the midst of a robust recovery, and things would have chugged along in October had the mandate and event cancellations not occurred, he said.
Jacques said the Troubadour hotel lost momentum in September as it "fell apart," but after the first week in October, the picture is looking brighter.
"While we have lost nearly all bookings in September, New Orleans is ready for business in October," he said. "We have seen some demand fall off initially, but we are seeing interest growing and demand [increasing] ... by mid-October, we expect weekends to be the best that we've seen this year."
Ranson said his team went through a complete overhaul on bookings. Not having these citywide events opens up opportunities to capture demand from businesses holding regional meetings and targeting sports travel. He said now is a good time to enhance packages on property such as pairing attractions that include restaurants and museums.
"It's not just an on-the ground effort focusing on those drive markets, but also on content — are we delivering to the right consumer?" he said.
Outlook on Rebound
While there has been widespread damage from Hurricane Ida, hoteliers want tourists to know that New Orleans is still open and functioning.
"We don't have water sitting in the street. We've got power in New Orleans; 95% of people and businesses are with power in those areas. Downtown and all of these attractions that people would want to come for, they're open," Ranson said.
Arbor Lodging Management's Patel said predicting New Orleans' rebound is tough because of the widespread damage of buildings.
"It's going to take more than just a few weeks to get those rebuilt," he said.
Specific to tourism, there's uncertainty around how much leisure travel will return and when. Patel said a lot of hotels in New Orleans are still open now, and there's a big push to get things fixed quickly. He anticipates leisure will return in the first quarter of 2022.
Both the end of third and fourth quarter are looking positive, but it's tough to truly gauge as most bookings will be week of or day of, Ranson said.
"Our transient, while great Thursday, Friday, Saturday, Sunday, have not been [booked] way in advance. So [from a] pacing perspective, it's not like we were showing big numbers in advance," he said.
Wilson said his property has been in the French Quarter since 1964 and has a strong repeat client base. He said he's cautiously optimistic about leisure travel.
"I think the month of October will be a little bit up in the air as people deal with COVID restrictions, the delta variant and the perceptions that the city has been decimated by Hurricane Ida," he said. "I do expect a sluggish October."
Wilson is looking forward to demand around LSU football this fall.
Performance
According to STR, CoStar's hospitality analytics firm, four-week moving average data shows New Orleans had an occupancy of 55.1% ending Sept. 18, compared to 63.7% in the comparable week of 2019. Average daily rate was $140.06 this year compared to $129.83, and revenue per available room was $77.13, compared to $82.70 in 2019.
Year to date as of August 2021, New Orleans hotel occupancy was up 16% to 47.4%, while ADR slipped 14.1% to $109.91 and RevPAR declined 0.3% to $52.08.
However, among the top 25 U.S. markets, New Orleans experienced the largest 2021 vs 2019 gains in both occupancy (+7.3% to 72.6%) in RevPAR (+18.2% to $114.37) during the week of Sept. 12 to 18.