New Orleans Hyatt rises from Katrina’s destruction

Published 1:33 pm Friday, October 14, 2011

The Hyatt Regency New Orleans, devastated by Hurricane Katrina in 2005, reopens Tuesday after a $275 million rebuild that creates a new business model for the downtown hotel.

Sports fans who swarm the adjacent Superdome and New Orleans Arena still figure in the model — the New Orleans Bowl, Sugar Bowl, BCS college football championship and NCAA men’s Final Four basketball championship are set for the Superdome over the next several months.

The hotel’s rebuild also envisions carving a niche in the city’s convention business.

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Developers say they will target smaller conventions that don’t need the space offered at the city’s giant riverfront convention center. Such conventions, they and tourism officials say, often go to other cities where the space they need is more readily available.

Poydras Properties Hotel Holdings, which includes a subsidiary of Chicago-based Hyatt Hotels Corp., bought the site in 2007 for $32 million and reconfigured the 32-story building to 1,193 rooms and suites and 200,000 square feet of meeting and event space.

Several restaurants are planned, including one expected to open in December by renowned New Orleans chefs John Besh and Brian Landry.

There is little resemblance to the original Hyatt, which opened in 1976, a year after the Superdome.

“The transition is from bricks and mortar to contemporary,” Hyatt Regency general manager Michael Smith said. “One of the words we don’t use in this transformation is renovation.”

The hotel is part of a complex centered on the Superdome that was heavily damaged by the hurricane.

The Superdome was rebuilt in a recently completed $336 million overhaul, while an office tower abandoned after the storm was bought by New Orleans Saints owner Tom Benson and refurbished. Also in the complex are the New Orleans Arena, home of the NBA’s New Orleans Hornets, and a projected entertainment district.

The Hyatt Regency’s business plan is more than just serving as a roost for thousands of fans who will pour in for the Sugar Bowl and BCS college football championship in January 2012, followed by the NCAA’s men’s Final Four basketball championships in April 2012 and the Super Bowl in 2013.

Smith said filling a void in the city’s convention business is the model.

New Orleans has a massive, mile-long convention center on the riverfront, about a mile from the Superdome complex.

Smith said the Hyatt has been reconfigured to serve smaller conventions that he said New Orleans often loses to cities such as Las Vegas, where more flexible facilities are available.

“We want to be self-contained, non-reliant on citywide conventions and be able to compete and bring in incremental business to the city of New Orleans,” Smith said.

Smith said the hotel uses the same business model as the Gaylord hotel chain, which aims to be a one-stop shop for conventions. Gaylord, the hospitality arm of Gaylord Entertainment Co., operates Gaylord Opryland in Nashville, Tenn.; Gaylord Palms in Kissimmee, Fla.; Gaylord Texan near the Dallas-Fort Worth International Airport at Grapevine, Texas; and Gaylord National at National Harbor, Md.

According to Smith Travel, which tracks hotel occupancy, the Hyatt Regency will bring the number of New Orleans hotel rooms to just more than 36,000, slightly short of the pre-Katrina number of 38,525. More than 21,000 rooms are in close proximity to the riverfront convention center.

The Hyatt Regency has been taking reservations for the past year and booking meetings. Smith wouldn’t go into details, citing competition, but said the hotel has sold out for 10 events. In six of those cases, the events are large enough that overflow guests have been booked at other local hotels, he said.

“We are very happy with the business we have booked for 2012 and 2013,” Smith said.

Stephen Perry, president of the New Orleans Metropolitan Convention & Visitors Bureau, said the lack of a hotel such as the Hyatt Regency has cost the city several hundred thousand nights of hotel bookings over the past decade.

“There was a building trend for about 10 years in Las Vegas and Orlando with mega-hotels with exhibition space, more like a convention center than a hotel,” Perry said. “New Orleans did not have similar types of properties.”

The Hyatt was rendered useless by Katrina. Furniture was sucked out of broken windows as the roof of the Superdome — being used as an evacuation center for thousands of people — was peeled back. Then-Mayor Ray Nagin holed up in the hotel during the disaster, which became something of a media center as flood waters isolated most of the city.

While the Hyatt’s tower remains, other elements have undergone radical transformations.

To start, guests will enter the lobby through a Loyola Avenue entrance, rather than using a driveway from Poydras Street that took guests into something closely resembling a dark cave.

Gone is the rotating restaurant on the top floor, replaced by a lounge and a health club where exercising guests can gaze on the Superdome.

Meetings and special events can be held in one of the hotel’s 25,000-square-foot ballrooms. There are 64 “breakout” rooms where convention-goers can break up for smaller meetings. Smith said the hotel also has two in-house exhibit halls totaling 75,000 square feet. Smith said that will enable the hotel to compete with such convention-exhibit venues as Las Vegas and attract meetings that don’t need the space of the city’s huge convention center.

Smith said building a similar hotel from scratch, including land acquisition, would cost about $500 million. The hotel will employ about 800 people and more for special events.

“The bottom line is that this is going to be good for the Hyatt and good for the rest of the city as well,” Perry said.