Posted March 24, 2021
Recovery in sight for the Crescent City
As COVID-19 case counts dwindle and the number of vaccinations pick up in New Orleans, the area’s hotel industry is benefitting from significantly more activity. As one of the nation’s premier drive-to leisure destinations, New Orleans is attracting hotel guests in droves as it reopens. As of mid-March, the city’s government has allowed bars, restaurants, and music venues, arguably its most in-demand attractions, to open to 50% capacity indoors and 100% capacity outdoors. The increases in hotel demand that have followed these developments are certainly very promising for the full recovery of the New Orleans hotel industry, particularly the leisure segment.
The city’s lodging sector will only be strengthened as its event calendar ramps back up. Excitingly, Jazz Fest 2021 has been rescheduled, rather than cancelled, and will be now taking place this year in the cooler month of October. It appears that many of the Big Easy’s recurring festivals, parades, and sporting events will also be back on the calendar either later in 2021 or early in 2022. There’s no doubt that Mardi Gras 2022 will be quite a party!
While these initial returns are inspiring, there are certainly hurdles to overcome as the recovery ramps up. New Orleans hotel owners and operators have indicated that they have seen very short booking windows, offering little pricing power and requiring nimble revenue management. Staffing is also a major issue in New Orleans, as it is in many markets. Operators cannot keep up with cleaning and sanitizing rooms after busy weekends as they struggle to fill housekeeping roles that were eliminated at the onset of the pandemic. Finally, while it is certainly more a matter of “when” than “if,” there is uncertainty about the timing of the recovery of the city’s convention calendar. That demand segment is expected to eventually pick back up, but not until 2022 at the earliest.
New Orleans remains a strong hospitality market, benefiting from various distinctive demand generators, an unparalleled charm, and an easily accessible location within the U.S. These intangibles make it a world-class destination for hotel guests and investors alike.
The Plasencia Group’s team has transacted more hotels in New Orleans than any other real estate investment firm in the country. Our decades of experience in New Orleans allow us to offer unique insight to sellers and buyers alike. Keep us in mind when you need sound advice on your assets in the Crescent City or elsewhere across North America.