NOLA hotel operators see thin profits as room rates flatten

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ADR: Average Daily Rate.  To a hotel operator that's the number you watch, always.  And while tourism and hotel stays in New Orleans appears to be robust, with more than 10-million hotel rooms sold in 2018, ADR is flat. 

The big hotels drive occupancy with on-site convention booking.  But for regular operators, they depend on the City's endless odyssey of festivals and events to fill hotel rooms, usually on the weekends.  But the money is made by filling hotel rooms midweek.  That's achieved when big-ticket events like a major convention, sporting event, or regional celebration like Mardi Gras is booked.  

A story in the Times-Picayune/New Orleans Advocate says New Orleans hotels have performed less than spectacular over the last three years.  And average room rates fell between 2016 and 2017, improving slightly in 2018.  

Complicating matters is increased competition from short term rentals and new hotel openings.  With thousands of available cut-rate rooms in people's homes, alternative lodging has taken a bite out of the business tradionally held by hotels.  Meanwhile, 13 new hotels have opened in the last three years and some of the biggest, like the Four Seasons going in at the former Trade Center, aren't even finished.

This lull didn't happen suddenly.  Hoteliers knew this would be a slower than normal year.  Factors like the airport construction and convention center expansion were planned for.  The growing of these two major installations will drive a recovery once they are complete and fully on line.  And the future looks bright as the City will host College Football National Championship in January and the Superbowl returns in 2024.